Reporting Capital Gains from Fractional Share in ITR-2

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T Bose

21 Points Posted on 30 June 2025

I had purchased five shares of a company—three shares on 06/08/2024 at ₹1515.35 each, and two shares on 29/08/2024 at ₹1508.35 each. Following a stock split in the ratio of
2:5, I became entitled to 12.5 shares. Since fractional shares (0.5) are not issued in dematerialized form, I received ₹309 in my bank account on 25/11/24 as settlement for the 0.5 fractional share.

In this context, I would appreciate your clarification on the following points. First, where should this transaction be reported in ITR-2? Should it be shown under Schedule CG as other normal short-term gains?

Second, can I report ₹309 as the “full value of consideration” received for the fractional share?

Third, how should I calculate the cost of acquisition for this fractional share? Should it be determined by proportionately allocating the total cost of the original five shares (₹7,562.75) across the post-split 12.5 shares—resulting in a cost of ₹302.51 for the 0.5 share—or, alternatively, by applying the FIFO method and attributing the fractional share to the most recent purchase (two shares at ₹1508.35), thereby calculating the cost as ₹301.67?

Fourth, what should be considered as the date of acquisition ?

Lastly, could reporting this transaction in ITR-2, despite its absence in AIS/TIS, result in a notice or mismatch inquiry? Should I provide feedback in the AIS portal about this gain? If yes, then where exactly in the AIS portal should this feedback be submitted?

Replies (3)

Quick Summary

This discussion addresses how to report capital gains from fractional shares in ITR-2. Key questions include where to report the transaction (Schedule CG or OS), how to determine the 'full value of consideration', and the correct method for calculating the cost of acquisition and date of acquisition for the fractional share. It also covers potential mismatches with AIS/TIS and how to provide feedback on the AIS portal.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 02 July 2025

Generally such fractional gains are reported under Schedule OS...

Tax Garden

Tax Consultant

2084 Points Posted on 21 May 2026

Fractional shares distributed by a platform carry the proportional cost basis and acquisition date from the original lot. In Schedule 112A for AY 2026-27, there is a new requirement to split gains by whether the sale occurred before or after July 23, 2024, because the LTCG rate changed from 10% to 12.5% on that date. Each scrip needs a separate row with ISIN, sale value, and allocated cost.

If a corporate action like a bonus changed the ISIN, use the adjusted cost of the post-action lot. The changes to ITR-2 this year, including the updated Schedule 112A structure, are covered in this [ITR-2 filing guide for AY 2026-27](https://taxgarden.in/blog/itr-2-ay-2026-27-who-can-file-changes-deadline).

Rushabh

Automation Expert

10733 Points Posted on 13 November 2026

Report the ₹309 under Schedule CG as a short-term capital gain, assuming the shares are listed equity shares and the fractional entitlement was settled in cash. The cash settlement is generally treated as consideration for the fractional share; it is not a dividend. A stock split does not ordinarily change the aggregate cost of the original holding—it adjusts the number of shares and the cost per share.
Cost of the 0.5 share: ₹302.51, using the proportionate allocation: total original cost ₹7,562.75 ÷ 12.5 post-split shares × 0.5. This gives a gain of about ₹6.49 before any eligible transfer expenses. Applying FIFO to identify the acquisition date may be relevant, but FIFO does not change the aggregate cost attributable to the fractional entitlement in this case.
Acquisition date: the split itself does not create a new acquisition date. Apply the applicable FIFO treatment to the underlying holding; on that basis, the fractional entitlement would ordinarily relate to the earliest-acquired shares, not the most recent purchase. As both purchase dates are within 24 months of the cash settlement, the gain is short-term either way.
AIS/TIS absence does not, by itself, prevent reporting the transaction in ITR-2. Report it accurately and retain the broker/company communication and bank credit evidence. You may submit AIS feedback if the relevant entry is available and incorrect or needs correction; feedback is generally submitted against an AIS information item, so if no item exists there may be nothing to mark. Check the current AIS interface for any option to report information not displayed, as portal functionality can change.

This treatment fits into the capital-gains reconciliation process, where corporate actions, broker records and bank credits need to agree. Manual practice work across these records is difficult; automation can reduce repetitive work while keeping professional judgment in control. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. For a walkthrough of compliance automation, connect with us on WhatsApp: https://wa.me/message/3HVOZ7HIY4ESC1