UNLISTED SHARES

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Unlisted shares are shares of a company that are not publicly traded on a stock exchange. They are also referred to as off-market stocks or over-the-counter (OTC) shares. Unlisted shares are typically owned by a relatively small number of investors, such as employees, founders, venture capitalists, or accredited investors. Because they are not traded on a regulated exchange, they can be more difficult to buy or sell, and their values may be less transparent than those of listed stocks. Unlisted shares are often traded on private markets, where buyers and sellers can negotiate prices directly without the transparency of public markets

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WHAT SELLS UNLISTED SHARES?

Existing shareholders of the unlisted company can sell unlisted shares. These can include Employees, Ex-employees, CEOs, Promoters, Private Equity investors, and more.

WHERE CAN WE LIQUIDATE AFTER IPO?

There is a lock-in period of 6 months once the company hits IPO (subject to regulatory requirements). It is regulated by SEBI.

TAXATION DETAILS

TShort-Term Capital Gain taxes to be paid on Unlisted Shares?
If you sell your shares within 2 years, then you will have to pay a Short-term Capital gain on Unlisted Shares. Short-term Capital Gain is added to your Income. So, as per the individual tax slab you need to pay Capital. IPO (subject to regulatory requirements). It is regulated by SEBI.

Long-Term Capital Gain taxes to be paid on Unlisted Shares?
If you sell your shares after 2 years, then you will have to pay Long-term Capital Gain on Unlisted Shares LTCG is 20% with indexation benefits.

Applicability of Taxes on Unlisted Shares once it is listed?
Taxes will remain the same irrespective of the listing of shares if bought in an unlisted market. Actually, to be eligible for taxes as per the listed market, one has to pay STT on buying and selling of shares. But, if you buy in an unlisted and sell in a listed market, you pay STT only on selling so, taxes of the listed market will not be applicable.