Hi
shares of a unlisted company are acquired by a listed company and compensation is paid to the shareholders in cash. Is the compensation received taxable. Do I take the sale consideration as compensation received and cost of acquisition on the date of acquisition and calculate capital gains?
thanks
Summary: Compensation received for unlisted shares is treated as Capital Gains. You must subtract your original cost of acquisition (and any transfer expenses) from the cash received. If held for ≤24 months, it is taxed at your income tax slab rate; if held for >24 months, it is taxed at a flat 12.5%. You should report this in ITR-2 or ITR-3.
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