A 20% listing gain, ₹2,326 in your pocket
Rohan got one lot of 50 shares in an IPO at ₹300, so ₹15,000 left his bank account. On listing day he sells all 50 at ₹360. That is a 20% listing gain, or ₹3,000 on paper. Here is what actually reaches him.
| Amount paid | 50 × ₹300 = ₹15,000 |
|---|---|
| Sale value | 50 × ₹360 = ₹18,000 |
| STT | 0.1% of ₹18,000 = ₹18 |
| Brokerage and other charges | ₹40 |
| Gain for tax | ₹18,000 − ₹15,000 − ₹40 = ₹2,960 |
| Tax (20% plus 4% cess) | ₹615.68 |
| Money in hand | ₹17,326.32 |
| Profit after tax | ₹2,326.32, about 15.5% on ₹15,000 |
So ₹673.68 of the ₹3,000 goes in STT, charges and tax. Still waiting for the allotment itself? The IPO allotment calculator shows your chances of getting a lot.
Listing day sale or holding for a year
The shares are already in your demat when they list, so even a listing day sale is a normal delivery sale. Sell within 12 months and the profit is a short-term capital gain, taxed at a flat 20% plus 4% cess, whatever your income tax slab:
Tax = (sale value − amount paid − charges) × 20% × 1.04
Hold for more than 12 months and it becomes long-term. Then the rate is 12.5% plus cess, and only on long-term gains above ₹1.25 lakh in the year. Switch "When you sell" to "After 12 months" with the same numbers and the tax drops to zero, so the profit is ₹2,942 instead of ₹2,326.32.
Two catches. The ₹1.25 lakh limit covers all your share and equity fund gains of the year together. And nobody knows the price a year later.
Why STT doesn’t cut your tax
STT is a tax on the trade itself, and the law does not let you deduct it from the capital gain. Brokerage, the DP charge and exchange fees are deductible. So Rohan’s taxable gain is ₹2,960 and not ₹2,942, even though he paid ₹18 of STT.
When the share lists below the issue price
Listing prices are never guaranteed. Say Rohan sells at ₹270, 10% below the issue price. He gets ₹13,500, pays ₹14 STT and ₹40 charges, and there is no tax. ₹13,446 comes back, a loss of ₹1,554.
For tax, the loss is ₹1,540, since STT is left out here too. A short-term loss like this can be set off against other short-term or long-term capital gains, but not against salary. Whatever is left can be carried forward for 8 years, but only if you file your return by the due date.
Profit at other selling prices
Same lot of 50 shares at ₹300, ₹40 charges, sold within 12 months. These prices are only examples, not a forecast.
| Selling price | Listing gain | Profit after tax |
|---|---|---|
| ₹240 | −20% | Loss of ₹3,052 |
| ₹270 | −10% | Loss of ₹1,554 |
| ₹300 | 0% | Loss of ₹55 |
| ₹330 | 10% | ₹1,139.32 |
| ₹375 | 25% | ₹2,919.32 |
| ₹450 | 50% | ₹5,885.32 |
| ₹600 | 100% | ₹11,818.32 |
Notice the ₹300 row. Sell at exactly the issue price and you are still ₹55 down, because STT and charges are paid anyway. Buying more of the same share later? The stock average calculator gives your new cost per share.
Frequently asked questions
How is IPO listing gain taxed?
Selling on listing day, or any time within 12 months, gives a short-term capital gain taxed at a flat 20% plus 4% cess, whatever your slab. On 50 shares bought at ₹300 and sold at ₹360 with ₹40 charges, the tax is ₹615.68 and the profit after tax is ₹2,326.32.
Is STT deductible from IPO listing gains?
No. STT is not deducted when the capital gain is worked out. Brokerage, the DP charge and exchange fees on the sale are deductible, so enter them in the charges box and the calculator adds STT by itself.
Is there tax on IPO shares held for more than a year?
After 12 months the gain is long-term, taxed at 12.5% plus cess only on long-term gains above ₹1.25 lakh in the year. That ₹1.25 lakh covers all your share and equity fund gains of the year together. The price after a year can be higher or lower than on listing day, nobody knows in advance.
What if the IPO lists below the issue price?
You sell at a loss and pay no tax on that sale. A short-term capital loss can be set off against other short-term or long-term capital gains, but not against salary. What is left can be carried forward for 8 years, only if you file your return by the due date.
Is IPO listing gain added to my salary and taxed at my slab?
No. It is reported under capital gains and taxed at the flat 20% plus cess, separate from your slab. If you are a resident and your other income is below the basic exemption limit, the unused part of that limit reduces the gain first.
Calculator maintained by Manoj. Last reviewed: 21-10-2026. Rates and rules are checked against official sources. Tell us if something has changed. Contact
