Compute capital gains tax on unlisted equity, startup pre-IPO shares, and private company stock under Budget 2024 revised tax rules (12.5% LTCG).
LTCG threshold for unlisted shares is 24 months.
For transfers on or after 23rd July 2024, Long Term Capital Gains (LTCG) on unlisted shares are taxed at a flat 12.5% without indexation (reduced from 20% with indexation). STCG is taxed at applicable income tax slab rates.
To be reported in Schedule CG of ITR-2 or ITR-3.
Unlisted shares include equity shares of private limited companies, unlisted public companies, and startup pre-IPO shares that are not traded on recognized stock exchanges (NSE/BSE). Capital gains on such shares are governed under Section 112 and Section 50CA.
Unlike listed equity shares (which qualify for LTCG after 12 months), unlisted shares require a holding period of more than 24 months from the date of acquisition to qualify as Long Term Capital Assets. Shares held for 24 months or less are Short Term.
Under Section 50CA, if unlisted shares are transferred at a price below the Rule 11UA Book Value (FMV) certified by a Chartered Accountant, the certified FMV is deemed to be the full value of consideration for computing capital gains in the seller's hands.
| Feature | Listed Equity (STT Paid) | Unlisted / Private Shares |
|---|---|---|
| LTCG Holding Period | > 12 Months | > 24 Months |
| LTCG Tax Rate | 12.5% (Above ₹1.25L exemption) | 12.5% Flat (No ₹1.25L exemption) |
| STCG Tax Rate | 20% Flat (Section 111A) | Applicable Slab Rate (Up to 30%) |
| Securities Transaction Tax (STT) | Applicable | Not Applicable |
| ITR Form Eligibility | ITR-2 or ITR-3 | ITR-2 or ITR-3 (ITR-1 strictly barred) |
No. Under the amended Section 112, the 20% tax rate with indexation has been replaced with a flat 12.5% tax rate without indexation for all transfers executed on or after 23rd July 2024.
No. Any individual who held unlisted equity shares at any time during the financial year is legally prohibited from filing ITR-1 (Sahaj) or ITR-4 (Sugam) and must mandatorily file ITR-2 or ITR-3 with detailed Schedule AL.
Yes. LTCG arising from the transfer of unlisted shares is eligible for Section 54F tax exemption if the net sale consideration is invested in purchasing or constructing a residential house in India.