Tax on IPO listing gains in India

Updated 19 October 2026

If you sell IPO shares for more than you paid, the profit is a capital gain. How it is taxed depends on how long you held the shares.

Holding period

For listed equity shares, the holding period starts on the date the shares are allotted to you, not the date you applied. Shares held for 12 months or less give short-term gains; more than 12 months, long-term gains.

Rates (as per the rules applying from 23 July 2024)

• Short-term capital gains (STCG) on listed equity, where STT is paid: 20%.
• Long-term capital gains (LTCG): 12.5% on gains above ₹1.25 lakh in a financial year.
• Surcharge and cess apply on top, depending on your income.

Selling on listing day

Selling on or soon after listing is a short-term gain. Some frequent traders treat their activity as business income instead — that changes the tax treatment, and is worth discussing with a tax adviser.

Losses

Short-term capital losses can be set off against short- or long-term gains; long-term losses only against long-term gains. Unused losses can be carried forward for eight years if you file your return on time.