Procedure of Off-Market Sale

General
1

How to do an off-market sale. What is the procedure for that? I want to make sale of shares which I have purchased 3-4 years back and now they are suspended. So, how their price will be determined. Do I have to sell them at the LTP or any price I wish.

Also, I want to know that by selling that stocks, I can show loss in my books and thus reduce my current year taxable income. For ex. I have 100 shares @100. I purchased them 3 years ago and now it is suspended and its LTP is 2 Rs. Then by selling it through off-market sale, can I book loss of Rs. 9800?

2

Shares suspended from trading will not have LTP, as they are not trading anymore.

You’ll have to find willing buyer off-market and negotiate price with them.

You can do off-market transfer through online facilities like CDSL Easiest , or NSDL Speed-E, or offline using DIS.

3

thanks. Can you also tell that whether it will help me in reducing my taxable income or not?

4

@Quicko can you.

5

Hey @Aditya_Gupta

If you sell the stock at a loss, it would be considered as a loss under the head of Capital Gains. You can set off the loss with other incomes as per the following rule:

  1. STCL (Short Term Capital Loss) can be set off against STCG & LTCG
  2. LTCL (Long Term Capital Loss) can be set off against LTCG only

As per your example, you can book the LTCL of INR 9,800. You can adjust it against LTCG from the sale of any other Capital Asset. However, it cannot be adjusted against any other income. The remaining loss can be carried forward for 8 years and adjusted against future LTCG income.

Hope this helps! :slight_smile:

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6

@Aditya_Gupta How do you plan to sell the shares if they are not traded anymore? And if you want to sell them to someone, who will be willing to buy these shares?

@ShubhS9 is there anyway to sell shares which are no longer listed and no longer traded?

@Quicko How can we book LTCL or STCL in such a case where we are not able to sell shares because they are no longer listed and no longer traded and I can’t find a willing buyer? How to write off the entire invested amount in this case?

7

As these shares aren’t trading on exchanges anymore, you cannot sell them from your trading terminal. However, if you find a willing buyer off-market, you can do an off-market transfer. The process is explained above.

8

Ya, how to find a willing buyer in this case where shares are neither listed nor traded anymore?

9

Hey @Praksy

You can report the loss only once you sell the shares. Alternatively, if you can’t find a willing buyer or if you feel the Company would not be listed again in the future, you can write off the investment in shares and report a loss in P&L Account.

Hope this helps!

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