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Private Markets Intelligence
Guides on ESOP taxation, cap tables, secondary transactions, and India's private market ecosystem.
How to Report Foreign Company ESOPs in ITR Schedule FA (Complete Guide)
When Must You Report Foreign ESOPs in Schedule FA of ITR? For Indian resident employees, Schedule FA (Foreign Assets) in ITR-2 or ITR-3 must include any equity shares, stock options, or RSUs (Restricted Stock Units) in a company incorporated outside India, regardless of whether you sold them during the financial year. Indian employees working for companies like Google, Microsoft, Amazon, Meta, or any multinational with a foreign parent company must report their parent company stock grants in Sc
Advance Tax on Unlisted Share Sales: Complete Calculation Guide
When Must You Pay Advance Tax on Unlisted Share Sales? Advance tax is mandatory when your total tax liability for the financial year exceeds ₹10,000, including tax on capital gains from unlisted share sales. The tax must be paid in four quarterly installments: 15% by June 15, 45% cumulative by September 15, 75% cumulative by December 15, and 100% by March 15. If you sell shares mid-year (especially in Q4: January-March), all prior installment deadlines have passed, requiring immediate full pay
ITR-2 vs ITR-3 - Which Income Tax Form Should You Use for Unlisted Shares?
Difference Between ITR-2 and ITR-3? ITR-2 is for individuals and HUFs with capital gains but no business or professional income, making it the correct form for salaried employees, retirees, and investors who sold unlisted shares. ITR-3 is mandatory for individuals with profits and gains from business or profession (including freelancers, consultants, partners in firms, and directors receiving remuneration classified as business income) who also have capital gains. If you have even ₹1 of busines
What is Authorised Capital?
What is Authorised Capital in a private company? Authorised capital (also called authorized share capital or nominal capital) is the maximum amount of share capital that a company is legally authorized to issue to shareholders, as stated in its Memorandum of Association (MOA). For example, if a company has an authorised capital of ₹10 lakh divided into 1 lakh shares of ₹10 each, it cannot issue more than 1 lakh shares without first increasing its authorised capital through a formal amendment pr
What is Paid-Up Capital?
Paid-up capital is the actual amount of money that shareholders have paid to the company in exchange for shares, representing real cash (or assets) received by the company. For example, if a company issues 1 lakh shares at ₹10 face value and shareholders pay the full ₹10 lakh, the paid-up capital is ₹10 lakh. This amount appears on the balance sheet under "Shareholders' Equity." Paid-up capital can be less than issued capital if shares are issued but not fully paid (partly paid shares), though
Differences between Authorised Capital vs Paid-Up Capital
Authorised Capital is the maximum amount of share capital a company can issue (legal ceiling specified in MOA), while Paid-Up Capital is the actual money shareholders have paid to the company for issued shares (real cash received). Think of authorised capital as your credit limit and paid-up capital as what you've actually spent. A company with ₹1 crore authorised capital may have only ₹10 lakh paid-up capital, meaning it has issued shares worth ₹10 lakh (face value) and can still issue ₹90 lak
What is Form No. MGT-1 - Register of Members?
Form No. MGT-1 is the mandatory statutory Register of Members that every company incorporated in India must maintain under Section 88(1)(a) of the Companies Act, 2013 and Rule 3(1) of the Companies (Management and Administration) Rules, 2014. This register contains complete details of all shareholders including their name, address, shares held, folio number, date of becoming a member, date of ceasing to be a member, and any transfers or transmissions. The register must be maintained at the com
Stamp Duty on Share Transfer in India: Complete State-wise Guide (2026)
What is Stamp Duty on Share Transfer? Stamp duty on share transfer is a state-level tax payable when ownership of shares changes hands through sale, gift, or other transfer mechanisms in India. The duty is calculated as a percentage of the transaction value or market value (whichever is higher) and varies significantly by state. For listed shares traded on stock exchanges where Securities Transaction Tax (STT) is paid, stamp duty is typically 0.015% on both buyer and seller sides. Physical sha
Stamp Duty on Unlisted Share Transfer: State Rates & Payment Guide (2026)
What is the Stamp Duty on Share Transfers in a private company? Stamp duty on unlisted share transfers ranges from 0.10% to 0.50% of transaction value depending on the state where the company is registered. Karnataka, Kerala, Goa, and Himachal Pradesh have the lowest rates at 0.10%, while Gujarat has the highest at 0.50%. * The buyer conventionally pays stamp duty, though this is negotiable in the Share Purchase Agreement (SPA). * Stamp duty must be paid within 3 months of executing the tran
What happens to Perquisite Tax paid on ESOP exercise if the company shuts down?
You exercised your stock options. You paid lakhs in perquisite tax on paper gains. The shares are now sitting in your name. And then the company shuts down or the valuation crashes or you realize those shares you paid tax on are worth ₹0. The question burning in your mind: Can I get that ₹3 lakh tax refund? I never actually made any money. The short answer that nobody wants to hear: No, the tax you already paid is not refundable. But there are ways to recover some of it through capital loss o
What is Rule 11UA Valuation for Unlisted Shares under Income Tax Rules, 1962?
What is Rule 11UA of Income Tax Act? Rule 11UA is the income tax regulation that determines Fair Market Value (FMV) for unlisted company shares in India. It mandates that FMV must be calculated using one of three prescribed methods, Net Asset Value (NAV), Discounted Cash Flow (DCF), or a weighted average of both, and must be certified by a merchant banker or chartered accountant. This FMV is used for calculating perquisite tax when employees exercise ESOPs (difference between FMV and exercise
What is Share Purchase Agreement (SPA)? Complete Execution Guide
The Share Purchase Agreement (SPA) is the binding legal contract that transfers ownership of unlisted shares from seller to buyer. Unlike Form SH-4 which is a standardised Companies Act form for recording the transfer, the SPA is a customised agreement that establishes the purchase price, payment terms, representations and warranties from both parties, conditions precedent to closing, indemnification obligations, and dispute resolution mechanisms. A properly drafted SPA protects both parties: