Conceptual · Article 3.1.4.1

Unlisted & Pre-IPO Shares.

Q: What is the capital gains tax on unlisted shares in FY 2025-26?

For shares held more than 24 months and sold on or after 23 July 2024: long-term capital gains at 12.5% without indexation, the Finance Act 2024 rate. For shares held 24 months or less: short-term capital gains at your applicable income tax slab rate — there is no flat 20% STCG rate as there is for listed equity. No Securities Transaction Tax applies to OTC unlisted transactions, and there is no ₹1.25 lakh annual exemption (that applies only to listed equity). Section 54F rollover into a residential property is available against both STCG and LTCG.

Q: Does my holding period reset when a pre-IPO company I own gets listed?

The widely accepted position is no — your holding period continues from your original purchase date and does not restart at the IPO listing date. If you bought pre-IPO shares 20 months before listing, you need only hold 4 more months to cross the 24-month long-term threshold. However, once the shares are listed and you sell on the exchange, listed-equity tax rules apply (a 12-month threshold, 12.5% LTCG above ₹1.25 lakh, 20% STCG, STT payable). Note the 6-month post-IPO lock-in for pre-IPO shareholders — you cannot sell on the exchange during that window regardless.

Q: Are the platforms selling pre-IPO shares in India regulated by SEBI?

No. SEBI issued a formal public warning in December 2024 stating that platforms facilitating transactions in unlisted securities operate outside SEBI's regulatory framework and are not authorised or recognised by SEBI. SEBI also passed interim ex-parte orders against specific unregistered online platforms in November 2024. Only recognised stock exchanges are authorised to provide trading platforms for securities in India, and there is no SEBI SCORES grievance-redressal mechanism for disputes arising from these platforms. As of early 2026, no SEBI-regulated platform for unlisted-share trading exists.

Q: What is the 6-month post-IPO lock-in for pre-IPO shares?

Pre-IPO shareholders are typically subject to a 6-month lock-in period after the company's IPO listing date, during which the shares cannot be sold on the exchange. It is a structural feature of Indian IPO regulations for certain shareholder categories. This matters for liquidity and tax planning: you may not exit at the listing pop, market prices can move sharply during the lock-in, and when you do sell after the window you will do so as a listed-share holder using listed-equity tax rules.

Q: How are ESOP shares in an unlisted startup taxed?

There are two stages. At exercise, the difference between the FMV on the exercise date (certified by a Category I Merchant Banker, certificate no older than 180 days) and your exercise price is taxed as a salary perquisite at your slab rate, with employer TDS. At sale, capital gains are computed as sale price minus that exercise-date FMV; the holding period runs from the date of allotment — STCG at slab if sold within 24 months, LTCG at 12.5% if held longer (for sales on or after 23 July 2024). Employees of DPIIT-recognised startups can defer the exercise-stage perquisite tax to the earliest of 48 months from the end of the relevant assessment year, the date the shares are sold, or the date they leave the company.

Q: What are Section 50CA and Section 56(2)(x) and why do they matter for unlisted shares?

Both anchor unlisted-share transactions to Fair Market Value. Section 50CA protects the revenue on the seller side: if you sell below FMV, the FMV is deemed your sale consideration for computing capital gains. Section 56(2)(x) protects it on the buyer side: if you buy more than ₹50,000 below FMV, the shortfall is taxable in your hands as Income from Other Sources in the year of purchase. FMV is determined under Rules 11UA/11UAA using the Net Asset Value or Discounted Cash Flow method, with a 10% safe-harbour band. Together they mean both parties should transact at or near FMV to avoid adverse tax consequences.

High-Reward Bets in a SEBI-Unregulated Grey Market.

Published as on 22 July 2026

Unlisted shares are equity stakes in companies that trade on no recognised Indian exchange — from early-stage startups to profitable unicorns waiting to list. Pre-IPO shares are the commercially prominent subset: bought before a company's IPO at a privately negotiated price, on the thesis of capturing the listing pop and post-listing gains. Both change hands in the OTC or grey market, outside any regulated venue and outside SEBI's framework. There is no exchange price discovery, no quarterly-results obligation, no investor redressal, and no certainty the IPO ever comes. Gains turn long-term only after 24 months, taxed at 12.5% without indexation for sales on or after 23 July 2024. A high-conviction satellite bet — for informed investors who can afford to lose the capital.

24 months

LTCG Threshold

12.5%

LTCG · No Indexation

6-month

Post-IPO Lock-In

Unregulated

SEBI Warning · Dec 2024

Executive Summary · Page 2

Executive Summary · 6 Findings

Pre-IPO investing sells a seductive story: own a future unicorn before the crowd, at a discount to the listing price. The story is real for a lucky few and expensive for many. These are equity stakes in companies you cannot see clearly, priced in a market no regulator polices, sold by platforms SEBI has formally warned against — and locked away for years if the IPO slips. The upside is genuine; so is the risk of a total loss.

Covers what unlisted and pre-IPO shares are and how they change hands, SEBI's December 2024 warning against unauthorised platforms, the honest gap between the pre-IPO thesis and its outcomes, the 24-month LTCG holding period and 12.5% post-July-2024 rate, the FMV rules under Sections 50CA and 56(2)(x), the tax treatment at IPO transition and the 6-month lock-in, ESOP and buyback taxation, the six structural risks, and six questions Indian investors ask.

Key Findings

Equity in companies that trade on no exchange.

Unlisted shares are equity in companies not listed on BSE, NSE or any recognised exchange. Pre-IPO shares are the subset expected to list soon — bought below the anticipated IPO price to ride the listing premium. They change hands in the OTC grey market: intermediary platforms, direct deals with promoters or PE holders, ESOP resales and secondary VC sales. Always settled in demat via NSDL/CDSL; never accept physical certificates.

SEBI has formally warned against the platforms.

In December 2024 SEBI issued a public warning that platforms facilitating unlisted-securities transactions operate outside its regulatory framework and are not authorised. It passed interim orders against specific unregistered online platforms in November 2024. Only recognised exchanges may run trading platforms — and there is no SEBI SCORES redressal for grievances arising here.

The pre-IPO thesis rests on assumptions that often fail.

The narrative needs five things to go right: the IPO happens on schedule, prices above your cost, holds after listing, the company stays healthy, and regulators stay away. Any one can break. IPOs are delayed for years, priced at or below grey-market levels, or list-and-correct sharply — and you cannot see the down-rounds and dilution coming without insider access.

Long-term only after 24 months — 12.5%, no indexation.

Unlisted shares turn long-term after a 24-month holding period, not 12. LTCG on sales from 23 July 2024 is taxed at 12.5% without indexation; STCG is at your slab rate, not a flat 20%. There is no STT on OTC transfers and no ₹1.25 lakh annual exemption. Section 54F can shelter gains reinvested in a residential property.

Price is negotiated, and the tax code polices FMV.

With no exchange, price comes from the last funding round, listed-peer multiples and platform quotes — opaque, and wide on the dealer spread. Two provisions anchor it to Fair Market Value: Section 50CA (sell below FMV and FMV is your deemed sale price) and Section 56(2)(x) (buy more than ₹50,000 below FMV and the shortfall is taxed as Income from Other Sources).

Illiquid, opaque, and capable of a total loss.

Six risks define the asset: illiquidity, structural information asymmetry, valuation opacity, regulatory and fraud exposure, IPO-timeline uncertainty, and dilution. Pre-IPO holders also face a 6-month post-listing lock-in. This is a small satellite allocation for informed investors who have done MCA-level diligence — never a core holding.

At A Glance

Metric	Value	Detail
Instrument	Unlisted equity	Off-exchange
Market	OTC / grey market	No price discovery
Regulation	Outside SEBI	Dec 2024 warning
LTCG threshold	24 months	Not 12
LTCG rate	12.5%	No indexation
STCG rate	Slab	No flat 20%; no STT
Downside	Total loss	If no listing / failure
Best Use	Satellite bet	Informed investors only

Exhibit 01: Unlisted vs Listed Equity Tax

Aspect	Unlisted	Listed
LT threshold	24 months	12 months
LTCG rate	12.5%	12.5%
LT exemption	None	₹1.25L/yr
STCG rate	Slab	20%
STT	Nil	Applies

Position for FY 2025-26 (AY 2026-27). Unlisted LTCG at 12.5% without indexation applies to sales on or after 23 July 2024; sales before that date were 20% with indexation. There is no exchange price, no STT and no ₹1.25 lakh shield on unlisted equity — the tax code substitutes FMV rules instead.

The Opening · Page 3

The Opening

A pre-IPO share is a bet on a door that has not yet opened. You buy equity in a company that trades on no exchange, at a price two strangers negotiated, in the hope that one day the company lists and the market pays more than you did. When it works — an early stake in a company that goes on to a blockbuster IPO — the returns can be extraordinary. When it doesn't, you own an illiquid slip of paper in a business you cannot see clearly, with no bid on the other side and no regulator to call. Both outcomes come from the same purchase.

"Listed markets are built on disclosure and a live price. The unlisted market is built on the absence of both. You are trusting a negotiated valuation, a platform SEBI has warned against, and an IPO that may never arrive — and pricing all three as if they were certain."
The Grey-Market Bargain

How it actually trades. There is no exchange. Shares move through intermediary platforms that match buyers and sellers at negotiated prices, through direct deals with promoters and PE investors, through employees selling vested ESOPs before a listing, and through early VCs trimming stakes. Every genuine transfer settles in demat form through NSDL or CDSL — insist on it, and refuse physical certificates outright.

The regulatory backdrop. In December 2024 SEBI publicly warned that the electronic platforms facilitating this trade sit outside its regulatory framework and are not authorised; in November 2024 it had already acted against specific unregistered online platforms. As of early 2026 no SEBI-regulated venue for unlisted shares exists. The entire ecosystem operates in a grey zone, and the investor carries the counterparty, pricing and fraud risk alone.

The Honest Boundary: Unlisted / pre-IPO shares are NOT a liquid asset — you may wait years for a buyer. They are NOT transparently priced — no exchange sets the number. They are NOT SEBI-protected — the platforms are unauthorised and offer no redressal. They ARE a high-risk, high-conviction satellite position for informed investors who have done company-level diligence and can absorb a total loss of the capital committed.

Structure

Part I

What They Are, How They Trade & SEBI's Warning

Part II

The Pre-IPO Thesis, Reality & How Price Is Set

Part III

Taxation: Capital Gains, IPO Transition, ESOPs & Buyback

Part IV

The Verdict: Risks, Diligence & a Satellite Allocation

Consider If

✓ A small, losable satellite sleeve

✓ You can do MCA-level diligence

✓ Multi-year horizon, no liquidity need

✓ You can absorb a total loss

Avoid If

✕ This is core or emergency money

✕ You need a known exit date

✕ You rely on platform quotes alone

✕ You want SEBI-backed protection

Part I

What Unlisted and Pre-IPO Shares Are, How They Trade, and SEBI's Warning

Equity in companies off the exchange, and the pre-IPO subset bought before a listing; the OTC grey-market channels — platforms, direct deals, ESOP and secondary sales, all settled in demat; and the single most important regulatory fact: SEBI's December 2024 warning that these platforms are unauthorised.

Part I · Page 4

The Two Categories

Type	What It Is	Range
Unlisted	Equity off any exchange	Startup to unicorn
Pre-IPO	Bought before listing	IPO-bound subset

Unlisted shares are equity in companies not listed on BSE, NSE or any recognised exchange — spanning early-stage startups to large, profitable private firms. Pre-IPO shares are the commercially prominent subset: bought below the expected IPO price to capture the listing premium and post-listing appreciation.

How They Actually Trade

Four Channels, One Settlement Rail

Deals happen via intermediary platforms matching buyers and sellers at negotiated prices; direct bilateral deals with promoters, PE investors or existing holders; ESOP resales by employees ahead of a listing; and secondary PE/VC sales. Whatever the channel, every genuine transfer settles in demat form through NSDL or CDSL. Refuse physical certificates — always insist on demat transfer.

SEBI's December 2024 Warning

The Single Most Important Fact

SEBI issued a formal public warning that platforms trading unlisted securities operate outside its regulatory framework, are not authorised, and that such trading may contravene the Securities Contracts (Regulation) Act, 1956 and the SEBI Act, 1992. Only recognised exchanges may provide trading platforms. Do not share sensitive personal or financial data with such platforms.

No Redressal, Full Exposure

In November 2024 SEBI passed interim ex-parte orders against specific Unregistered Online Platforms (UOPs). As of early 2026, no SEBI-regulated venue for unlisted trading exists. There is no SEBI SCORES grievance mechanism here — the investor carries full exposure to fraud, misrepresentation and pricing opacity.

What this means practically: the entire platform ecosystem sits in a regulatory grey zone. That does not make transacting illegal for an ordinary investor, but it removes the safety net you take for granted with listed securities — no disclosure regime, no price regulation, no redressal. Treat every counterparty and every quote as unverified until you have checked it yourself.

Part II

The Pre-IPO Thesis, the Honest Reality, and How the Price Is Set

Why the opportunity is real but the assumptions frequently break — delayed IPOs, pricing at or below cost, listing-day corrections, down-rounds and dilution; and how a negotiated OTC price is anchored to Fair Market Value by Sections 50CA and 56(2)(x).

Part II · Page 6

Thesis vs Reality

The Opportunity

Access a growing company before retail can, at a discount to the expected IPO price, and ride the listing premium and post-listing gains. Several well-known Indian companies did reward pre-IPO investors who timed entry correctly — the upside is genuine.

Five Assumptions That Break

(1) The IPO happens on schedule — many slip for years on DRHP observations or weak markets. (2) It prices above your cost — not guaranteed; banks may price at or below grey-market levels. (3) The listing holds — many Indian IPOs pop then correct sharply. (4) The company stays healthy — down-rounds, dilution and failure are invisible from outside. (5) Regulators stay away — SEBI has flagged post-DRHP speculative surges driven by asymmetric information.

Capital Can Stay Locked

If the IPO is delayed and no secondary buyer appears, your money can be trapped for years with no way to mark it or exit — the defining hazard of the thesis.

How the Price Is Determined

Reference	What It Is
Last round	Recent PE/VC valuation, less dilution
Peer multiples	Listed P/E, EV/EBITDA, P/Sales
Platform quotes	Indicative, unregulated

With no regulated market, price is OTC supply and demand — and dealer spreads are wide. The tax code refuses to let those prices drift too far from Fair Market Value.

Section 50CA — Seller Anchor

Sell unlisted shares below FMV and the FMV is deemed your sale consideration for computing capital gains — you cannot shrink your taxable gain by selling cheap.

Section 56(2)(x) — Buyer Anchor

Buy more than ₹50,000 below FMV and the shortfall is taxed in your hands as Income from Other Sources in the year of purchase. FMV is set under Rules 11UA/11UAA by the NAV or DCF method, with a 10% safe-harbour band; ESOP valuations need a Category I Merchant Banker certificate no older than 180 days.

Part III

Taxation: Capital Gains, the IPO Transition, ESOPs and the Buyback Overhaul

The 24-month long-term threshold and the 23 July 2024 rate split; why the holding period does not reset at listing but the 6-month lock-in still binds; the two-stage ESOP framework with DPIIT deferral; and how buyback proceeds became dividend income from October 2024.

Part III · Page 8

Capital Gains (FY 2025-26)

Sale Date	LTCG Rate	Indexation
Before 23 Jul 2024	20%	With indexation
On/after 23 Jul 2024	12.5%	None

The 24-Month Rule

Unlisted shares turn long-term only after more than 24 months — not 12 as for listed equity. STCG (held ≤24 months) is taxed at your slab rate, with no flat 20% option and no STT. Budget 2025 left these rates unchanged. Section 87A rebate is generally available against unlisted LTCG.

Section 54F Rollover

Both STCG and LTCG on unlisted shares can be exempted by reinvesting the full net sale proceeds in a residential property — bought within 1 year before or 2 years after the sale, or constructed within 3 years. A meaningful tool for high-value exits.

The IPO Transition

6-Month Post-Listing Lock-In

Pre-IPO holders are typically locked for 6 months after listing — you cannot sell on the exchange during that window regardless of price. Factor it into liquidity and tax planning.

Holding Period at Listing

It Does Not Reset

The widely accepted position: your holding period continues from the original purchase date — it does not restart at listing. Bought pre-IPO 20 months before listing? You need only 4 more months to cross 24. But sell on the exchange after listing and listed-equity rules apply — a 12-month threshold, 12.5% LTCG above ₹1.25 lakh, 20% STCG, and STT.

ESOPs — Two Stages

Exercise → Sale

Stage 1 (exercise): (FMV on exercise date − exercise price) taxed as a salary perquisite at slab, with employer TDS; FMV certified by a Category I Merchant Banker. Stage 2 (sale): gains = sale price − exercise-date FMV; holding period runs from allotment — STCG at slab if <24 months, LTCG at 12.5% if longer. DPIIT startups can defer Stage 1 tax to the earliest of 48 months from the relevant AY-end, sale, or leaving the company.

Buyback Overhaul

Buyback	Who Pays	How Taxed
Before 1 Oct 2024	Company (~23.3%)	Tax-free to holder
On/after 1 Oct 2024	Shareholder	Dividend at slab

From October 2024 the company-level buyback tax is abolished; proceeds are taxed as dividend income at the holder's slab rate, and the cost of the bought-back shares becomes a capital loss (set off in-year, carried forward up to 8 years). Buybacks are now far less tax-efficient for higher-bracket investors.

Part IV

The Verdict

Genuine upside. Genuine risk of a total loss.

Part IV: The Verdict · Page 10

30-Second Summary

Unlisted and pre-IPO shares are equity stakes in companies off any recognised exchange, traded in an OTC grey market that SEBI formally warned against in December 2024. There is no live price, no disclosure regime, and no investor redressal. The pre-IPO thesis — buy cheap, ride the listing pop — is real for a few and fails for many: IPOs slip, price below cost, or list and correct, and you cannot see a company's deterioration from the outside.

On tax, gains turn long-term only after 24 months, taxed at 12.5% without indexation for sales from 23 July 2024; STCG is at slab, with no STT and no ₹1.25 lakh shield. The holding period does not reset at listing, but a 6-month lock-in binds pre-IPO holders. Sections 50CA and 56(2)(x) anchor deals to FMV; ESOPs are taxed in two stages; buyback proceeds are now dividend income. Treat this as a small satellite allocation — for informed investors who have done the diligence and can absorb a total loss.

"The listed market pays you in transparency and liquidity; the unlisted market charges you for their absence and pays you, if at all, in a listing that may never come. Size the position to what you can afford to lose entirely — because on this asset, that is a real and recurring outcome, not a tail you can ignore."
The Final Orientation

The Bottom Line: If you proceed, keep it a small satellite sleeve of a diversified portfolio and never core or emergency money. Do the diligence yourself — audited financials from the MCA portal, the Articles of Association for transfer restrictions, the full cap table, and an independent FMV cross-check to avoid a Section 56(2)(x) hit. Insist on demat settlement and refuse physical certificates. Assume the IPO may not come, capital may be locked for years, and the platform is unregulated with no redressal. Verify every quote independently, and commit only what you can lose in full.

ADWIZR · July 2026

Six Structural Risks

The Risks

✕ Illiquidity — no regulated market

✕ Information asymmetry (no LODR)

✕ Valuation opacity / platform bias

✕ Regulatory & fraud exposure

✕ IPO timeline uncertainty

✕ Dilution in later rounds

Diligence Before You Buy

✓ Demat transfer only (NSDL/CDSL)

✓ MCA financials from mca.gov.in

✓ Articles: transfer / lock-in clauses

✓ Full cap table & ESOP pool

✓ Independent FMV cross-check

✓ Assess counterparty risk

Three Misconceptions

What Investors Get Wrong

(1) "The IPO is a sure thing." Many are delayed for years, priced below cost, or corrected sharply after listing. (2) "The platform price is the fair price." Quotes are unregulated, spread-heavy and seller-influenced. (3) "I can exit whenever I want." There is no ready buyer, and a 6-month post-listing lock-in binds pre-IPO holders.

vs Listed Equity

Opaque & Illiquid vs Transparent & Liquid

Unlisted: no exchange, no disclosure, 24-month LTCG, no STT, illiquid — a high-risk satellite bet. Listed: live price, LODR disclosure, 12-month LTCG with a ₹1.25 lakh shield, STT, daily liquidity — the core. Different assets for different roles.

24 mo

LTCG threshold

12.5%, no indexation

Grey

Market

Outside SEBI

Satellite

Allocation

Total-loss capable

Investor FAQ

Questions Indian Investors Ask

Six questions, answered directly.

Investor FAQ · Page 12

Frequently Asked Questions

Q1 What is the capital gains tax on unlisted shares in FY 2025-26?

For shares held more than 24 months and sold on or after 23 July 2024: LTCG at 12.5% without indexation, the Finance Act 2024 rate. For shares held 24 months or less: STCG at your applicable income tax slab rate — there is no flat 20% STCG rate as there is for listed equity. No Securities Transaction Tax applies to OTC unlisted transactions, and there is no ₹1.25 lakh annual exemption (that applies only to listed equity). Section 54F rollover into a residential property is available against both STCG and LTCG.

Q2 Does my holding period reset when a pre-IPO company I own gets listed?

The widely accepted position is no — your holding period continues from your original purchase date and does not restart at the IPO listing date. If you bought pre-IPO shares 20 months before listing, you need only hold 4 more months to cross the 24-month long-term threshold. However, once the shares are listed and you sell on the exchange, listed-equity tax rules apply (a 12-month threshold, 12.5% LTCG above ₹1.25 lakh, 20% STCG, STT payable). Note the 6-month post-IPO lock-in for pre-IPO shareholders — you cannot sell on the exchange during that window regardless.

Q3 Are the platforms selling pre-IPO shares in India regulated by SEBI?

No. SEBI issued a formal public warning in December 2024 stating that platforms facilitating transactions in unlisted securities operate outside its regulatory framework and are not authorised or recognised by SEBI. SEBI also passed interim ex-parte orders against specific unregistered online platforms in November 2024. Only recognised stock exchanges are authorised to provide trading platforms for securities in India, and there is no SEBI SCORES grievance-redressal mechanism for disputes arising from these platforms. As of early 2026, no SEBI-regulated platform for unlisted-share trading exists.

Q4 What is the 6-month post-IPO lock-in for pre-IPO shares?

Pre-IPO shareholders are typically subject to a 6-month lock-in period after the company's IPO listing date, during which the shares cannot be sold on the exchange. It is a structural feature of Indian IPO regulations for certain shareholder categories. This matters for liquidity and tax planning: you may not exit at the listing pop, market prices can move sharply during the lock-in, and when you do sell after the window you will do so as a listed-share holder using listed-equity tax rules.

Q5 How are ESOP shares in an unlisted startup taxed?

There are two stages. At exercise, the difference between the FMV on the exercise date (certified by a Category I Merchant Banker, certificate no older than 180 days) and your exercise price is taxed as a salary perquisite at your slab rate, with employer TDS. At sale, capital gains are computed as sale price minus that exercise-date FMV; the holding period runs from the date of allotment — STCG at slab if sold within 24 months, LTCG at 12.5% if held longer (for sales on or after 23 July 2024). Employees of DPIIT-recognised startups can defer the exercise-stage perquisite tax to the earliest of 48 months from the end of the relevant assessment year, the date the shares are sold, or the date they leave the company.

Q6 What are Section 50CA and Section 56(2)(x) and why do they matter for unlisted shares?

Both anchor unlisted-share transactions to Fair Market Value. Section 50CA protects the revenue on the seller side: if you sell below FMV, the FMV is deemed your sale consideration for computing capital gains. Section 56(2)(x) protects it on the buyer side: if you buy more than ₹50,000 below FMV, the shortfall is taxable in your hands as Income from Other Sources in the year of purchase. FMV is determined under Rules 11UA/11UAA using the Net Asset Value or Discounted Cash Flow method, with a 10% safe-harbour band. Together they mean both parties should transact at or near FMV to avoid adverse tax consequences.

Key Terms & Definitions

Unlisted Share

An equity share of a company not listed on BSE, NSE or any other recognised Indian stock exchange. It ranges from early-stage startups to large, profitable private firms, and trades only in the OTC grey market rather than on a regulated venue.

Pre-IPO Share

The commercially prominent subset of unlisted shares: equity in a company expected to conduct an IPO in the near-to-medium term, bought below the anticipated listing price to capture the listing premium and post-listing appreciation.

OTC / Grey Market

The informal, over-the-counter channel where unlisted shares change hands at privately negotiated prices, outside any recognised exchange. There is no live price discovery and, per SEBI's December 2024 warning, the facilitating platforms are unauthorised.

Fair Market Value (FMV)

The tax-code valuation of unlisted shares under Rules 11UA/11UAA, computed by the Net Asset Value or Discounted Cash Flow method with a 10% safe-harbour band. Sections 50CA and 56(2)(x) tie both seller and buyer to FMV.

Post-IPO Lock-In

The 6-month period after a company's listing during which pre-IPO shareholders in certain categories cannot sell on the exchange — a structural feature of Indian IPO regulation that constrains liquidity and tax timing.

ESOP Perquisite Tax

Stage-one tax on employee stock options: the gap between the exercise-date FMV (Category I Merchant Banker certified) and the exercise price, taxed as salary at slab. DPIIT-recognised startup employees may defer it under Section 80-IAC.