Tax treatment of listing-day gains

Mon, 11 May 2026 00:00:00 +0000

Listing-day gains are profits realised by investors who sell shares allotted in an initial public offering (IPO) on the very first day those shares are admitted to trading on a recognised stock exchange. The tax treatment of such gains is governed by Section 111A of the Income Tax Act 1961, which taxes short-term capital gains (STCG) on listed equity at a flat 20% (as revised by the Finance Act 2024), provided that Securities Transaction Tax (STT) has been paid on the sale.

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Tax treatment of listing-day gains