As markets rise, any investors are looking at picking stocks of unlisted firms from the grey market. Calculating tax on stocks listed on an exchange is easier. The profits from stocks sold after holding them for over 24 months are taxed as long-term capital gains. If the taxpayer sells stocks below the FMV, the income tax authorities will consider the FMV as the selling price. Once a company is listed on a stock exchange, the unlisted or pre-IPO shares get locked for one year.

Source: Mint July 08, 2021 13:30 UTC