Income Tax treatment for delisted shares

Hi, I hold demat shares that were delisted due to defaults by the company. Cannot sell it and it looks unlikely to relist again. Can I book this shares as a LTCL against the LTCG. Please revert.

Hello @Rajesh ,

You can report the loss only once you sell the shares. Alternatively, if you feel the Company would not be listed again in the future, you can write off the shares and report a loss in P&L Account. This loss can either be a long-term or short-term loss depending upon the holding period of the shares.

Thanks for the reply. Please clarify what is the P&L account wherein I can write off and report this LTCL (holding above 1 year). I use ITR-2 for individual.

Hello @Rajesh

If the sale of shares is treated as a Business Income (ITR-3), the taxpayer can write off the investment in shares and report a loss in the P&L Account. However, if you’re filing ITR-2, you can book the LTCL by showing the entire cost of acquisition as a loss in ITR. This loss can be set off against LTCG.

You already suggested that we can write off the stock that got unlisted from bse/nse and the company is in liquidation and unikely to list again. As such I am willing to write it off independent of whether it lists again or no. Once I write it off, i can claim the loss. The unlisted stock would still be in my DP/demat. What would happen to those stocks. May be if they ever get relisted in 0.001% case, then one can always pay capital gain tax from that point?

Could u please confirm that I can just write it off and claim the capital loss? The company is already in liquidation?

@Kaushal_Soni @Divya_Singhvi @Laxmi_Navlani @Sakshi_Shah1 @AkashJhaveri can you?