How to Show Unlisted Shares in Your ITR — Complete Filing Guide

# How to Show Unlisted Shares in Your ITR — Complete Filing Guide

Filing taxes on unlisted shares confuses many investors — the ITR portal has multiple schedules, and unlisted shares don't appear in your AIS (Annual Information Statement) the way listed stock sales do. This guide walks through exactly what to fill where.

Disclaimer: This article is educational and not personalised tax advice. Tax rules change with each budget. Consult a chartered accountant for your specific situation. Rates mentioned reflect general principles; verify current rates at incometaxindia.gov.in.

Step 1: Which ITR Form Do You Need?

Unlisted share capital gains cannot be reported in ITR-1 (Sahaj). You must use:

• ITR-2: If you are salaried, have income from other sources, and have capital gains — but no business income
• ITR-3: If you have business or professional income in addition to capital gains

If you only *hold* unlisted shares (no transactions in the year) but your income exceeds ₹50 lakh, you still need ITR-2 or ITR-3 to declare assets under Schedule AL.

Step 2: Identify Your Capital Gains

For each unlisted share sale in the financial year, determine:

1. 1Date of purchase and date of sale
2. 2Holding period = sale date minus purchase date

- ≤ 24 months → **Short-Term Capital Gain (STCG) - > 24 months → Long-Term Capital Gain (LTCG)**

1. 1Cost of acquisition (from your purchase invoice)
2. 2Sale consideration (from your sale invoice)

Step 3: Schedule CG — Where to Enter the Numbers

In ITR-2 or ITR-3, navigate to Schedule CG (Capital Gains).

### For Short-Term Gains (held ≤ 24 months): Go to Part A — Short-term Capital Gains → Section A5: Short-term capital gains from other assets

Enter:

• Full value of consideration (sale price × shares sold)
• Cost of acquisition (purchase price × shares)
• Cost of improvement (usually 0 for shares)
• Transfer expenses (brokerage or platform fee if any)
• The resulting STCG

STCG from unlisted shares is taxed at your applicable income tax slab rate — it is added to your total income.

### For Long-Term Gains (held > 24 months): Go to Part B — Long-term Capital Gains → Section B5: Long-term capital gains from other assets (Section 112)

Enter:

• Full value of consideration
• Cost of acquisition (and indexed cost if applicable — see Step 4)
• The resulting LTCG

Step 4: Indexation for Long-Term Gains

For unlisted shares held more than 24 months, you may be able to claim an indexation benefit. This inflates your cost of acquisition using the Cost Inflation Index (CII) published by the income tax department, reducing your taxable gain.

Formula: Indexed Cost = Original Cost × (CII of Year of Sale ÷ CII of Year of Purchase)

Example:

• Bought 100 shares at ₹200 in FY 2021-22 (CII: 317)
• Sold at ₹500 in FY 2024-25 (CII: 363)
• Indexed cost = ₹200 × (363 ÷ 317) = ₹229 per share
• LTCG per share = ₹500 − ₹229 = ₹271 (instead of ₹300 without indexation)

Note: Budget 2024 introduced changes to indexation rules for some asset classes. Verify whether indexation is available for your specific transaction by consulting a CA or checking the current Finance Act.

Step 5: Schedule AL — Declaring Unlisted Share Holdings

If your gross total income exceeds ₹50 lakh, you must declare all assets in Schedule AL (Assets and Liabilities).

For unlisted shares, declare them under "Shares and Securities (other than listed)":

• Enter the cost of acquisition (not market value)
• Include ISIN and company name in the description field
• Shares held in demat are declared even if not sold

This is not a tax trigger — it is a disclosure requirement. You are taxed only when you sell.

Documents to Keep

| Document | Why You Need It | |---|---| | Purchase invoice from Polemarch | Proof of cost and date of acquisition | | Sale invoice | Proof of sale price and date | | Demat statement | Shows ISIN, entry, and exit | | CII table | For indexation calculation | | Form 26AS / AIS | Cross-check any TDS deducted |

Common Mistakes to Avoid

1. 1Using ITR-1: Not allowed with capital gains — return will be defective
2. 2Forgetting Schedule AL: Mandatory above ₹50 lakh income
3. 3Using the wrong section in Schedule CG: Unlisted shares go in "other assets," not the equity/MF sections
4. 4Missing the LTCG/STCG cutoff: The 24-month clock starts from the date shares are credited to your demat, not the date you paid

*Published by the Polemarch editorial team. Not tax advice — consult a chartered accountant.*