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How IPO gains are taxed (FY 2026-27)
| When you sell | Tax | Notes |
|---|---|---|
| Within 12 months of allotment (including listing day) | 20% short-term capital gains | Plus surcharge (capped at 15%) and 4% cess. Selling on listing day is a delivery sale, not intraday. |
| After 12 months | 12.5% on long-term gains above ₹1.25 lakh a year | The ₹1.25 lakh exemption is shared across all listed shares and equity funds. |
- Cost: your allotment (issue) price. Brokerage on sale is deductible; securities transaction tax (STT) is not.
- Losses: a short-term loss can be set off against short- or long-term gains; a long-term loss only against long-term gains. Carry forward up to 8 years if you file on time.
- NRIs: the broker deducts tax at source on the gain. File an Indian return to claim back any excess. See NRIs in IPOs.
Worked examples and the full rules: tax on IPO listing gains in India.
Frequently asked questions
How much tax do I pay on IPO profit in India?
If you sell within 12 months of allotment, the gain is short-term and taxed at 20% plus 4% cess (and surcharge if your income is above ₹50 lakh). After 12 months, gains above ₹1.25 lakh a year are taxed at 12.5% plus cess.
Is IPO listing gain taxable if I sell on listing day?
Yes. Shares allotted in an IPO and sold on listing day are a delivery sale, so the gain is a short-term capital gain taxed at 20% plus cess, not speculative income.
How much tax on Jio Platforms listing gains?
Jio Platforms listed at ₹1,358 against a ₹1,119 issue price. On a 12-share lot sold at the listing price, the gain is ₹2,868 and the tax is about ₹597 (20% plus 4% cess, before any surcharge).
Do NRIs pay tax on IPO gains in India?
Yes, at the same rates. The broker deducts the tax at source when the shares are sold; NRIs can file an Indian return to claim back any excess.