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Tax Payable on Sell of IPO Shares

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Varun

Proressional

47 Points Posted on 30 April 2022

I had applied for an IPO of a company in Q-2 FY 2016-17 and was allotted its shares during IPO allotment process. I held the shares of the company till Jul-2021. I sold them them all in Aug-2022 and made an approximate profit of ₹ 85,600/-.

I had opted for old tax regime for FY 2021-22. My queries are:
1. Will my profit from the sell of shares be considered as LTGC?
2. Do I need to pay any LTGC tax on profit of ₹ 85,600/-?
3. Do I need to use ITR-2 to file tax return for FY 2021-22?
4. Where (on which sheet in the excel file) on ITR form do I need to disclose my profit?

Replies (4)

Quick Summary

This discussion clarifies the tax implications of selling IPO shares. The user sold shares in August 2022, making a profit of ₹85,600, and had opted for the old tax regime in FY 2021-22. The consensus is that the profit is considered Long Term Capital Gains (LTCG). Importantly, up to ₹1 lakh in LTCG is tax-exempt, meaning no tax is payable on this profit. The discussion also confirms that ITR-2 is the appropriate form for filing and advises downloading a tax report from the broker, though manual calculation is recommended due to potential errors in broker reports.