Is it legal to purchase NSDL Unlisted Shares in India? •

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Keep Up Appropriate Records: To protect your investment, make sure all transactions—including share purchase agreements and payment receipts—are thoroughly documented.

In conclusion, even if it is allowed to invest in unlisted shares, such as those of NSDL, in India, doing so carries greater risks than investing in listed securities. Before making a move, investors should use prudence, carry out extensive due investigation, and think about speaking with financial counselors.
It is allowed for Indian residents to buy unlisted shares, including those of NSDL (National Securities Depository Limited). Before moving further, it is crucial to comprehend the regulatory environment and the dangers involved

✅ Legality and Regulation.
• Legality: Buying and selling unlisted shares is permitted in India. These shares can be purchased by investors through private placements, employee stock options (ESOPs), or intermediaries that specialize in unlisted stocks. www.unlistedinvest.com.
• The Securities and Exchange Board of India (SEBI) regulates the securities market, but unlisted shares are not traded on recognized stock exchanges, making them exempt from some restrictions. SEBI has warned investors against trading unlisted stocks on unapproved electronic platforms, underlining that such activities may violate securities rules. www.unlistedinvest.com

Risks and considerations.
Unlisted shares lack liquidity as they are not traded on public exchanges. Selling these shares may be difficult and entail finding a private buyer or waiting for the company to go public. www.unlistedinvest.com
Difficulty determining fair market value for unlisted shares due to lack of transparency in trading platforms. Prices are frequently determined through discussions, and they may not reflect the company’s true worth.

Regulatory Risks: Unregistered platforms lack investor protection tools seen in regulated marketplaces. In the event of a disagreement or fraud, remedies may be limited. www.unlistedinvest.com

• Tax implications: Capital gains from unlisted shares are taxable. Long-term capital gains (for shares held for more than 24 months) are taxed at 12.5% beginning in July 2024, excluding indexation benefits.
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  Best practices for investors. • Conduct Due Diligence: Research the company’s financial condition and future prospects before investing.
  Use Authorized Intermediaries. To minimize risks, work with recognized brokers or platforms that follow regulatory criteria. WW Understand Lock-in Periods: Be aware that pre-IPO shares are normally subject to a lock-in term of six months after listing, during which they cannot be sold.

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