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Exiting Tata Tech or IREDA IPO Stocks for Quick Gains? Prepare for Short-Term Capital Gains Tax

If you’ve recently reaped profits by selling Tata Technologies or IREDA IPO stocks on their listing day, it’s crucial to grasp the tax consequences associated with gains made within a day of acquiring the stock. Notably, both Tata Technologies and Indian Renewable Energy Development Agency (IREDA) have seen substantial listing gains, with Tata Technologies opening at ₹1,192.05 on December 4, from an issue price of ₹500, and IREDA opening at Rs 65.15 from an issue price of ₹32.

The year 2023 has witnessed at least 15 stocks listed with remarkable surges of 80-100 percent on their debut day. While these stocks are subject to standard taxation, the circumstances of purchase influence their taxability.

Considering you sold the shares within a year of allotment, the profits from the sale will be treated as short-term capital gains. Consequently, you’ll be liable to pay a 15 percent tax, along with education and higher education cess. Be prepared for the tax implications when capitalising on listing day gains.

Rugmini Dinu