What is my tax liability If I trade in Unlisted Shares?

What is my tax liability If I trade in Unlisted Shares?

Income/loss from Sale of equity shares is covered under the head ‘Capital Gains’

Under the head ‘Capital Gains’, income is further classified into:
(i) Long term capital gains, or (ii) Short term capital gains.


Short-term capital gains (STCG)

If unlisted equity shares are sold within 24 months of purchase, the seller may make short term capital gain (STCG) or incur a short-term capital loss (STCL). The seller makes short-term capital gain when shares are sold at a price higher than the purchase price. 

Short-term capital gains are taxable at Slab rate .

  

Long-term capital gains (LTCG)

If unlisted equity shares  are sold after 24 months of purchase, the seller may make a long-term capital gain (LTCG) or incur a long-term capital loss (LTCL). 

Long-term capital gains are taxable at 20% after the benefit of Indexation.


Calculation of short-term/Long Term capital gain= Sale price Less Expenses on Sale Less Purchase price


Exemption under section 54F is available to Individual or HUF assessee’ in case capital gain arises on the sale of any Long Term capital assets (not being a residential house property). So, exemption of Long Term Capital Gain (LTCG) arises on the sale of unlisted shares is covered under section 54F, but not Short Term Capital Gain (STCG)

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