Question ID :
44678
stcg on unlisted shares
in a case of sale of unlisted share of a salaried employee purchased unlisted shares and sold the shares in 3months from date of purchase
i)it is a case of short term capital gains on sale of unlisted shares
the party to whom the shares was sold has deducted tds as the sale is more than 50 lakhs sec 194(Q) is applicable and shown as sale of goods
and it appears as business receipts in the AIS of the salaried employee how is the correction to be made and shown as sale of securities in the ais as the salaried employee is not a dealer in share
2 where in the ITR2 is short term capital gains on sale of unlisted shares to be shown ?
Posted by
KUSHAL HEGDE
on
Jul 07, 2024
Filed Under
Capital Gains
In the given case of a salaried employee selling unlisted shares within 3 months:
Correction in AIS: The TDS deducted under Section 194Q (on sale of goods) is likely an error since the sale of shares is a capital asset and not treated as a sale of goods. The employee should file a correction request with the Income Tax Department for rectification of the AIS, requesting the sale to be correctly reflected as the sale of securities. Additionally, the TDS should be treated as related to capital gains rather than business receipts, as the individual is not in the business of trading shares. The correct head should reflect "Capital Gains" and not "Business Receipts."
Short Term Capital Gains Reporting in ITR-2: The short-term capital gains from the sale of unlisted shares should be reported under "Schedule CG" in ITR-2. Specifically, for short-term capital gains (STCG) arising from the sale of unlisted shares, fill in "Part B – Capital Gains", providing details of the transaction, such as:
Description of the asset (Unlisted Shares),
Date of acquisition and Date of transfer,
Sale proceeds,
Cost of acquisition,
Short-term capital gains (if any).
These details will allow the correct tax liability calculation.
Posted by
SACHIN KUMAR RAI on
May 12, 2025