Cost of acquisition is the value for which you acquired an asset. The Income Tax Department’s page on the sale of shares says it is reasonable to include the expenses you incurred to acquire it. The gain is then the sale price, minus that cost, minus the cost of improvements the Act allows, minus the expenses of the transfer.
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Capital Gains Calculator
Tax on shares, equity funds, debt funds, property and gold for one sale.
Open calculatorOn a normal IPO the cost is the issue price you paid for the shares that were allotted. You acquire them on allotment, which is before the listing day. The price the exchange prints on listing day is a sale price only if you sell that day. It is not a second cost. The listing-gains guide uses one sample lot at the issue price and a sample sale, and it says so.
A discount in an employee or shareholder quota is the cost when that lower price was not taxed in your salary. If the employer’s discount was already taxed as a perquisite, the cost is the value the salary computation used, not only the cash you paid. This note does not recompute a perquisite. The Form 16 line is the place to read it.
Expenses of the transfer sit in a different box. Brokerage and commission on the sale reduce the gain. Stamp duty and legal costs of a transfer can too, where they are wholly for that transfer. Securities transaction tax does not. The department’s page says no deduction is allowed for any sum paid on account of it.
Improvements matter for a house more than for a share. A coat of paint is not a share’s cost. For land or a building bought before 23 July 2024, the capital gains guide explains the one indexation choice that still exists. Shares in this window use the price you paid, with no indexation.
Demat holdings use first-in-first-out. The lot that entered the account first is treated as the lot you sold, and that lot’s cost is the one you report. Mixing two allotments and typing an average price will not match the broker’s statement or the Annual Information Statement.
A gift of shares, or shares you received on a merger, can take the previous owner’s cost. That is a different rule from an IPO you paid for in cash. If the allotment advice and the demat statement disagree on the number of shares, use the advice and ask the registrar before you file. The capital gains calculator will use whatever cost you type.
Checked on 3 November 2026. Type the cost you can support with the allotment note or the contract note. The calculator does not invent it.
Questions
What is the cost of an IPO share?
For a normal allotment it is the issue price you paid. A lower employee or shareholder price is the cost when that discount was not taxed in your salary. If the discount was already taxed as a perquisite, the cost is the value that salary counted.
Does brokerage on the sale go into the cost?
Brokerage on the sale is a transfer expense. It reduces the gain, and it is not added to the cost of acquisition. Securities transaction tax is neither. The department allows no deduction for it.
Do I use the listing price as my cost?
No. Listing is the day you can sell. The shares were already yours from allotment, at the price you paid. A broker statement that starts from the listing price has to be corrected before you file.
Sources
Figures checked 3 Nov 2026.