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

Ms. Rao is a resident individual who owns an unlisted company's equity shares acquired 3 years ago. She sells them. For tax purposes under the framework in the NISM X-B syllabus, the gain on these shares is:

The gain is long-term. Unlisted equity shares need a holding period of more than 24 months to be long-term, and Ms. Rao held them for 3 years. The 12-month threshold applies only to listed securities, and no blanket exemption applies.

  1. AShort-term, because only listed shares qualify for long-term treatment
  2. BLong-term, because unlisted shares are long-term after 24 monthsCorrect
  3. CLong-term, because unlisted shares are long-term after 12 months
  4. DExempt under section 10(38) irrespective of holding period

Explanation

Unlisted equity shares are long-term if held for more than 24 months. With 3 years of holding, the gain is long-term. The 12-month threshold applies to listed shares, and the old section 10(38) exemption no longer applies.

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