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You bought the shares, then they were delisted. Can you claim the loss?

balwant jain
By Balwant Jain

3 min read | Updated on October 06, 2026, 12:43 IST

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SUMMARY

Can losses from delisted shares be claimed as capital losses? Know when the loss can be recognised and whether it qualifies as short-term or long-term.

Can I claim a loss on my investment in delisted shares?

Unless and until these shares are either transferred by you or are extinguished by the company the capital loss can not be said to have accrued to you.

Investors can be left in a difficult position when companies they once held shares in are delisted from the stock exchange. While the shares may continue to appear in the investor’s demat account, they can become difficult to sell or transfer. This raises an important tax question: when can such a loss actually be claimed, and would it qualify as a short-term or long-term capital loss?
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Today's Q&A explains such details in response to a query by a reader.

Question: I hold a number of shares listed on the BSE, and around 40-50 companies have since been delisted. As a result, the value of these shares has effectively become zero, leading to a substantial financial loss. Additionally, since these shares are delisted, even internal or off-market transactions are not possible. Kindly advise whether the losses from these delisted shares can be treated as long-term capital losses or short-term capital losses?
Answer: Profits or loss on sale of a capital asset arises only when the capital asset is transferred. Just because some of the shares held by you have been delisted does not result into transfer of the capital asset as these shares are very much sitting in your demat account.

Unless and until these shares are either transferred by you or are extinguished by the company the capital loss can not be said to have accrued to you.

I do not think that just because the shares have been delisted the same cannot be transferred. Shares of private limited company which are not listed can also be dematerialised so you can transfer these shares through off market deal to any of your friends or relative at very nominal price like Re 1 for each share. You will be able to claim the loss in the year in which the same are transferred. In case the shares are extinguished by the company, you can claim the loss in the year in which the same are extinguished by the company.

Since the shares are no longer listed the holding period for making the loss long term is 24 months against 12 months applicable for listed shares. So the capital loss will be short term or long term depending on your holding period. The long term loss can be set off against any long term capital gains during the year. In case sufficient long term capital gains are not available for such set off during the same year the same can be carried forward for eight year to be set off against long term capital gains. If the holding period is less than 24 months the loss shall be short term capital loss which can be set off against long term capital gains and short term capital gains as well. The same can be carried forward for eight years.

Have a personal finance, mutual fund, or income tax query? We will try to get them answered by experts. Write to sangeeta.ojha@rksv.in
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Disclaimer: The views and opinions expressed above are those of respective experts/commentators and do not reflect the views of Upstox. The above Q&A is only for informational purposes and should not be considered investment or tax advice from Upstox. Please consult a tax expert for your complex tax problems.

About The Author

balwant jain
Balwant Jain is a Mumbai-based tax and investment expert.

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