Here is all you need to know about claiming losses on delisted shares.
How to claim losses on delisted shares
Several investors who have gone through losses on account of shares are delisted. Therefore, investors are not particular about claiming the losses of shares. The delisting of shares results in the impossible selling of shares until the company goes through the exit route. It is effectively irrecoverable and is a loss to the taxpayer. Once the company goes through liquidation or is referred to NCLT under IBC, NCLT declares the company to drop the shares and claim the loss.
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WHAT IS DELISTED SHARE?
- When the shares of the listed companies have been removed from the stock exchange completely for buying and selling purposes.
- These kinds of shares can’t be traded on the stock exchanges -National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
- The delisting of shares is governed by the market regulator, the Securities and Exchange Board of India (SEBI).
HOW TO CALCULATE AND CLAIM SUCH LOSSES
Capital gains are the category to adjust losses against gains.
The loss faced on the drop of the share capital is long term, which continues for 24 months, else it will be considered as short term.
In these kinds of scenarios, shares are held as stocks in trade and the loss of the value of an investment will be deducted from the profits and loss account.
For long-term losses, the same loss will start out against long-term capital gains consisting of capital gains arising on the sale/redemption of listed equity shares and units of an equity-oriented scheme.
The short-term losses are set off against capital gains, whether short or long. The losses cannot be carried forward during a year against the eligible taxable capital gains.
Published By:
Aysha
Published On:
Mar 30, 2022
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