ITR for Company Directors and Unlisted Shares AY 2026-27

Use ITR-2 where no business or professional income exists and ITR-3 where it does.

Reviewed: 2026-08-05 by CA Nikhil Gupta. Current law: AY 2026-27 is filed under the Income-tax Act, 1961; income arising from 1 April 2026 falls under the Income-tax Act, 2025 where relevant.

For related guidance and tools, visit the Income Tax and Salary Hub.

Legal or Computational Framework

Governing rule

The return requires directorship and unlisted-equity particulars even where there was no sale. ESOP, founder shares, foreign shares and private-company transfers can also create salary, capital-gain or foreign-asset schedules.

Correct workflow

List every directorship and unlisted holding; capture company identifiers, opening, acquisition, transfer and closing quantities and values; calculate perquisite or gain; choose ITR-2 or ITR-3; reconcile company records.

Step-by-step method

1. List every directorship and unlisted holding.
2. capture company identifiers, opening, acquisition, transfer and closing quantities and values.
3. calculate perquisite or gain.
4. choose ITR-2 or ITR-3.
5. reconcile company records.
6. Reconcile the conclusion with official statements and supporting documents.

Worked example

A salaried employee is a non-executive director and holds startup shares but has no business income. ITR-2 is generally appropriate even if total income is ₹18 lakh and no share was sold.

The example is an audit trail, not a substitute for the user's facts. Change one input—residence, payment date, tax year, asset, return form, GST status, employer category or supporting document—and the result can change.

Edge cases

• Nominee directorship still needs review: a nominee or professional director must disclose the directorship in the ITR’s director schedule regardless of who holds the beneficial interest — the MCA/company record showing the individual as director triggers the disclosure, not the economic ownership.
• Foreign unlisted shares can trigger Schedule FA: ESOP or founder shares in a foreign parent or group entity require Schedule Foreign Assets disclosure for the full year held, independent of whether Schedule Capital Gains has anything to report.
• ESOP exercise and sale are separate tax events: exercise creates a salary perquisite (FMV on exercise date minus exercise price) taxed in that year; a later sale creates a separate capital-gain event computed from the exercise-date FMV as cost, not the original exercise price.
• Dormant-company directorship is not ignored: holding a director position in a struck-off or dormant company during the year still requires disclosure — dormant status under the Companies Act does not exempt the individual from the ITR director schedule.
• Corporate actions affect quantity and cost: a bonus issue, rights issue or share split during the year changes both the opening/closing quantity and the per-share cost basis, and must be reconciled against company records before any gain is computed.

What Generic Pages Miss

Practical Documentation Checklist

• Form 16 and income schedules
• Residential-status file
• Capital-gain and loss schedules
• Foreign-asset/director checklist
• AIS and Form 26AS
• Form-selection memo

For the complete rules on this topic, see the core guide: New ITR Forms for AY 2026-27: Key Changes Explained.

See the broader Income-tax Act 2025 study guide hub for related rules and calculators on this topic.

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