You hold old physical share certificates and want to sell them

The first thing to know is that physical share certificates are no longer sellable as they are. Since 2019, listed securities can only be transferred in dematerialised form, so a paper certificate has to be converted into electronic shares in a demat account before any sale. The only things you can still do with a physical certificate directly are transmit it to an heir or correct the order of names, not sell it.

There is a helpful development for exactly this situation. SEBI has opened a special one-year window, running into early 2027, allowing old physical shares held before the 2019 cut-off to be re-lodged and dematerialised, with a one-year lock-in on the shares once they are credited. For an NRI sitting on decades-old certificates, this is the practical route: convert the certificates into your demat account, then sell them on the exchange in the ordinary way.

Check one thing before you start: the name printed on the certificate may not be the name in the register today. Companies rename, merge and delist, and the certificate stays valid through all of it. Tracing the current entity from the CIN works the same way whether the shares are still in your name or have gone to the IEPF.

The cost of shares bought long ago is not the tiny original price. For shares acquired before 1 April 2001, you may substitute their fair-market value as on that date as the cost (Section 55(2)(b)). And for listed equity, a further protection applies: the gain that had accrued up to 31 January 2018 is grandfathered, so your cost is taken as the higher of what you actually paid or the value on 31 January 2018, which shelters years of appreciation (Section 112A).

Bonus and rights shares have their own cost rules, bonus shares issued after 1 April 2001 are treated as costing nothing, while older ones take the 2001 value. Between the 2001 substitution and the 2018 grandfathering, the taxable gain on genuinely old shares is usually far smaller than the raw difference between the original price and today's, which is the point most holders miss.

Once the shares are in demat form and sold, the tax is the ordinary listed-equity position. Long-term gains, on shares held more than twelve months, are taxed at 12.5% on the amount above the ₹1.25 lakh annual exemption, with no indexation, for sales on or after 23 July 2024 (Section 112A). Short-term gains are taxed at 20% (Section 111A), the rate having risen from 15% on that date.

As a non-resident, the buyer side deducts TDS under Section 195 on your gain. A practising CA handles the whole chain: getting the certificates dematerialised through the special window, establishing the 2001 and 2018 cost figures so the gain is correctly small, and reconciling the TDS so any excess comes back on your return.