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Unlisted Shares Taxation

The unlisted shares are not listed on any of the recognized stock exchanges (NSE/BSE) in India. Instead, such stocks' trading takes place on the OTC (over-the-counter) market. The unlisted shares are the companies' stocks at the pre-IPO stage. Thus, they provide a good investment opportunity for long-term investors.Since the unlisted shares are not traded over any of the recognised stock exchanges, no securities transaction tax (STT) is levied. The unlisted shares taxation would depend on whether the stocks are being held for long-term or short-term.The unlisted shares taxation is different fr

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Unlisted Shares Taxation

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  1. Unlisted Shares Taxation The unlisted shares are not listed on any of the recognized stock exchanges (NSE/BSE) in India. Instead, such stocks' trading takes place on the OTC (over- the-counter) market. The unlisted shares are the companies' stocks at the pre- IPO stage. Thus, they provide a good investment opportunity for long-term investors.Since the unlisted shares are not traded over any of the recognised stock exchanges, no securities transaction tax (STT) is levied. The unlisted shares taxation would depend on whether the stocks are being held for long- term or short-term.The unlisted shares taxation is different from that of the listed ones. When we consider the listed stocks, the cost and the sale price are easily accessible as traded over the stock exchange. FMV or fair market value is considered in the case of unlisted shares. To compute the taxation of the unlisted shares, there is a comparison of FMV with a specific sale price. The higher of these two values are reflected as the sale consideration for the unlisted shares. The cost of transfer and acquisition of stocks is subtracted from this value to determine the capital gains. Unlisted Shares Taxation

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