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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Other Products

Ms. Kavita Rao sold unlisted shares of a private company held for 30 months and made a gain. As per the treatment taught in NISM X-B, how is this gain generally taxed?

The gain is a long-term capital gain taxed at 12.5% without indexation. Unlisted shares become long-term after 24 months, and the 30-month holding qualifies. Slab-rate treatment applies only to short-term holdings, and indexation is not available under the current rate.

  1. AShort-term capital gain at slab rates
  2. BLong-term capital gain at 12.5% without indexationCorrect
  3. CLong-term capital gain at 20% with indexation
  4. DExempt under Section 10

Explanation

Unlisted shares are long-term if held for more than 24 months. 30 months qualifies as long-term. Under the current regime long-term gains on such assets are taxed at 12.5% without indexation, so the slab-rate and indexation options are wrong.

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