Tax implications on MSEI unlisted shares sale

fireboltt

User: Tax_Planning_Question
Subject: Tax implications on MSEI unlisted shares sale
If I buy MSEI unlisted shares today and sell after IPO, what will be tax treatment? LTCG or STCG? What is holding period requirement

fireboltt

Reply by: CA_Tax_Consultant
Short-Term Capital Gains (STCG) taxed at investor's applicable income tax slab if held for less than 24 months. Long-Term Capital Gains (LTCG) taxed at 12.5% without indexation benefits if held for more than 24 months. This is effective from July 23, 2024 as per Union Budget 2024. So need to hold for 2 years to get LTCG treatment.

fireboltt

Reply by: Lock_In_Period_Info
Also remember as per SEBI regulations effective from August 2021, retail investors and HNIs have 6 months lock-in from date of listing. So even if IPO happens you cant sell immediately. Planning taxation accordingly is important before investing in unlisted shares.