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Five Percent Shareholders Under Schedule III: The Balance Sheet Date Test

The percentage is computed at the balance sheet date. A shareholder who crossed 5% during the year but is below it at year end is not disclosed — and the computation is made...

Published
Updated
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4 min
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6 answered
  • Medium Complexity
Topic
Accounting Standards & Bookkeeping
Published
September 7, 2026
Last updated
Sep 7, 2026
Reading time
4 min
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Last updated: September 2026Verified against: Government sources

The requirement

Clause (g) of Note 6(D)(I): shares in the company held by each shareholder holding more than 5 per cent shares, specifying the number of shares held.

Note that the threshold is more than 5 per cent — a holder at exactly 5 per cent falls outside it.

The date question, and its consequence

Schedule III does not say on what date the percentage is measured. The guidance note fills the gap: in the absence of any specific indication of the date of holding, the date for computing such percentage should be taken as the balance sheet date.

And it spells out the result: if during the year any shareholder held more than 5% equity shares but does not hold as much at the balance sheet date, disclosure is not required.

That is a point-in-time test, and it is worth contrasting with the promoter shareholding disclosure added by the 24 March 2021 amendment, which requires the percentage of change during the year. The two disclosures answer different questions — one is a snapshot of concentration at the reporting date, the other is a measure of movement.

A company reporting both will sometimes show a promoter whose shareholding changed materially during the year but who appears in the 5% table only at its closing level, or not at all.

Five percent shareholders: per class, and per instrument

Though it is not specified as to whether the disclosure is required for each class of shares or not, companies should disclose the shareholding for each type of equity instrument. Accordingly, the percentage should be computed separately for each class of shares outstanding within equity shares.

This matters where a company has ordinary shares and shares with differential voting rights. A holder may be above the threshold in one class and below it in another, and a combined computation would obscure both facts.

The disclosure also extends to instruments entirely equity in nature, to the extent applicable — so a class of compulsorily convertible preference shares treated as equity carries its own 5% computation.

The comparative

This information should also be given for the comparative previous period. Reading the two years together is what makes the point-in-time test workable — a reader can see who entered and who left the list, even though the disclosure itself does not track movement.

What the five percent shareholders table contains

  • the name of each shareholder above the threshold;
  • the number of shares held; and
  • in practice, the percentage held, since that is the basis on which the shareholder was identified.

Common mistakes

  • Listing as five percent shareholders those who crossed the threshold at any point during the year.
  • Computing the percentage across all classes combined.
  • Omitting the comparative period table.
  • Applying the disclosure to equity shares only where other equity instruments exist.
Quick recapKey facts & short answers

Key Facts About Five Percent Shareholders

  • Applies in: All states across India, under the relevant central law.
  • Mode: Mostly online via the official government portal.
  • Typical timeline: Ranges from a few days to a few weeks depending on the case.
  • Non-compliance: May attract penalties, interest or late fees.
  • Expert help: TaxClue completes the entire process end to end for you.

What does clause (g) require?

Shares in the company held by each shareholder holding more than 5 per cent shares, specifying the number of shares held.

On what date is the percentage computed?

In the absence of any specific indication of the date of holding, the date for computing the percentage should be taken as the balance sheet date.

What is not written down will be remembered differently by everyone involved.

— TaxClue Compliance Desk

Five Percent Shareholders: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.

Related Services & Guides

Why This Matters

Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly.

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Vikas Sharma Tax & Compliance Expert at TaxClue

Experienced in company registration, GST, trademark, and compliance. Helping Indian businesses stay compliant.

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Disclaimer: This article is for general informational purposes only and does not constitute professional tax, legal or financial advice. Laws, rates and due dates change and can vary by individual case — always verify with the relevant government source (e.g. mca.gov.in, incometax.gov.in) or consult a qualified professional before acting. TaxClue accepts no liability for decisions taken based on this content.

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Questions, answered

Short, direct answers to the 6 questions readers ask most on this topic.

Shares in the company held by each shareholder holding more than 5 per cent shares, specifying the number of shares held.

In the absence of any specific indication of the date of holding, the date for computing the percentage should be taken as the balance sheet date.

If during the year a shareholder held more than 5% equity shares but does not hold as much at the balance sheet date, disclosure is not required.

Though it is not specified whether the disclosure is required for each class, companies should disclose the shareholding for each type of equity instrument, and the percentage should be computed separately for each class of shares outstanding within equity shares.

Yes. This information should also be given for the comparative previous period.

It is to be provided for instruments entirely equity in nature, to the extent applicable.