If you sold shares that you bought before February 2018, one number can cut your tax bill: the price of that share on 31 January 2018. Most people searching for “share price on 31st January 2018” want exactly this. Here is how to find it and how to use it.
What is “grandfathering” in simple words?
Long-term capital gains tax on listed shares started in 2018. To be fair to people who already owned shares, the law says gains made up to 31 January 2018 are not taxed. Only the gain made after that date is. This protection is called grandfathering and it sits under Section 112A of the Income Tax Act.
The two-step formula
This applies to equity shares (and equity mutual funds) bought on or before 31 January 2018, where the sale is long term. Your cost of acquisition is worked out like this:
- Step 1: take the lower of (a) the fair market value on 31 January 2018 and (b) your actual selling price.
- Step 2: compare that figure with your actual purchase cost, and take the higher one. This is your cost of acquisition for tax.
Your taxable gain is the selling price minus this cost. For listed shares, the fair market value is generally the highest price quoted on a recognised stock exchange on 31 January 2018. If there was no trading that day, the highest price on the previous trading day is used. Please confirm with the Income Tax Department or a tax professional.
Worked examples
| Case | Bought at | Price on 31 Jan 2018 | Sold at | Step 1 (lower of FMV, sale) | Step 2 (higher of step 1, cost) | Gain per share |
|---|---|---|---|---|---|---|
| Price rose after Jan 2018 | ₹100 | ₹180 | ₹250 | ₹180 | ₹180 | ₹70 |
| Price fell after Jan 2018 | ₹100 | ₹180 | ₹150 | ₹150 | ₹150 | ₹0 |
| Bought above the Jan 2018 price | ₹200 | ₹180 | ₹250 | ₹180 | ₹200 | ₹50 |
In the first case, without grandfathering the gain would be ₹150 per share. With it, only ₹70 is taxed. In the second case, the rule gives you no tax and no loss. In the third case, your actual cost is used because it is higher.
Where to find the 31 January 2018 price
- Open the historical price data on the NSE or BSE website.
- Search for your share and choose the date 31 January 2018.
- Note the highest price of that day (the “high”), not just the closing price.
- For mutual funds, check the NAV for 31 January 2018 on the AMC site or the AMFI website.
- Keep a screenshot or printout with your tax papers.
Your broker’s capital gains statement may already apply the rule. Even so, it is wise to check one or two shares by hand.
Points to remember
- Bonus shares: if you sell bonus shares after 31 January 2018, reports and tax guides say the 31 January 2018 value is used for cost. Check how your shares were issued.
- STT: securities transaction tax needs to have been paid on purchase and sale for the benefit to apply, with some exceptions.
- Reporting: shares bought on or before 1 February 2018 must be reported in Schedule 112A of the income tax return, trade by trade.
- Trader or investor: people who treat shares as stock-in-trade (business income) cannot claim this benefit.
- Tax rate: from 23 July 2024, long-term gains on listed equity above ₹1.25 lakh in a year are taxed at 12.5% (earlier it was 10% above ₹1 lakh). Please confirm the current rate on the Income Tax Department website.
What to track every quarter
- Notices on the NSE and BSE announcement pages.
- Orders of the NCLT, SEBI or other regulators, where relevant.
- The company’s latest filings and the auditor’s remarks.
- Any statement from the resolution professional or the company.
Key terms in simple words
| Term | Meaning |
|---|---|
| EBITDA | Profit from operations before interest, tax and depreciation. |
| PAT | Profit after tax, the profit left for owners. |
| 52-week range | The lowest and highest price in the last year. |
| Compounding | Growth on growth: each year’s gain is added to the base for the next year. |
How we prepared this article
We collect numbers from company results, exchange filings where available and public news and price pages, and we note the date of each price. Where sources disagree, we say so instead of picking one quietly. Scenario tables use a simple formula and are examples, not predictions. We do not take payment to publish targets. Found a mistake? Tell us and we will correct it.
Frequently asked questions
Which price on 31 January 2018 should I use?
The highest price quoted on a recognised exchange on that day. If the share did not trade that day, use the highest price on the last previous trading day. Confirm with a tax professional.
Does this apply to mutual funds?
It applies to equity-oriented mutual funds as well. The fair market value is the NAV on 31 January 2018.
What if I bought after 31 January 2018?
Then grandfathering does not apply. Your actual purchase cost is used.
Can I create a loss using this rule?
No. The two-step formula stops the grandfathering rule from creating a loss. A loss can still arise if your actual cost is higher than the selling price.
How often is this article updated?
We review it after each quarterly result and when major company news arrives. The review date is shown at the bottom of the page.
Where can I check the live share price?
On the NSE and BSE websites or in your broker’s app. Prices on this page carry a date and may be delayed.
Are the scenarios an analyst target?
No. They are simple examples built from one formula and different growth rates. Real prices can be far above or below them.
Conclusion
The 31 January 2018 price decides how much of your old gain is tax-free. Find the highest price on that day, apply the two steps, keep proof, and report it correctly in your return. For tricky cases such as bonus shares, rights issues, demergers or mergers, ask a chartered accountant.
Related reading: NSE unlisted share price, ITC share price target 2050.
Watch: a related video
Video by CA Rachana Phadke Ranade: What Is Grandfathering Concept In Long Term Capital Gains Tax. This is a third-party video shown for learning only. Tax rates change, so check the current rules before you file. It is not tax or investment advice.
Sources
- Quicko: Section 112A, LTCG on shares
- Tax2win: Section 112A guide
- Income Tax Department (India)
- AMFI (mutual fund NAV history)
- NSE India and BSE India
Tax rules change. Information as of 13 October 2026. Last reviewed 13 October 2026.
Disclaimer: This article is for education only. Share prices and forecasts can change, and past performance does not guarantee future results. It is not personal investment advice, and SharePriceHub is not a SEBI-registered adviser. Please check current information on official sources and speak to a qualified financial adviser before you invest. Read the full disclaimer.
