Income Tax on Unlisted Shares in India

Originally published at: Income Tax on Unlisted Shares in India | Learn by Quicko

A Stock that is not listed on a recognized stock exchange is an unlisted stock. A trader or investor who buys and sells unlisted stocks should file ITR and pay tax on the income. Sale of Unlisted Shares is a Capital Gains Income as per the Income Tax Act. The Income Tax treatment of unlisted…

Hi @Aditya_s,

When a taxpayer sells any long-term capital asset, he/she can claim exemption from capital gains tax by investing into specified securities or units of the specified fund as per Sec 54E, 54EA, 54EB, 54EE. Thus, if you want to claim exemption from capital gains on sale of long term unlisted shares, you can make specified investments. Read more about it here – Capital Gain Exemption.

Can I offset the Long term capital loss of listed shares with long term capital gains of unlisted shares?
Please advise

Hi @Niraj,

LTCL from listed shares can be set off against LTCG from unlisted shares since they are long-term and capital gain in nature.


I have 2 queries

  1. Is indexation mandatory for LTCG from RSU sale OR can we pay 10% tax without indexation benefits.

  2. I purchased a land from LTCG amount. Can it be claimed for exemption?



Hi @Pankaj_Jindal

  1. You can pay 10% tax without indexation benefit if the shares sold by you are listed on the stock exchange in India.

  2. You can claim exemption u/s 54F for purchase of land if you are planning to construct house property on that land within 2 years of LTCG.

If the shares purchased are now unlisted on NSE/BSE. Can this loss be written off?


Capital gain/losses arise only when there is a transfer of capital asset. If the capital asset is not transferred, there will not be any capital gain or loss. Hence, in your case, you cannot set it off against Capital Gains unless the capital loss is realised. Capital Losses can be booked but at the time of buy-back or liquidation of a company when the actual transfer occurs.

Hope this helps