NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Capital Gains
Under the current Income-tax provisions, an individual sells unlisted equity shares of a private company. What is the minimum period of holding for the gain on these shares to be treated as long-term?
Unlisted shares are long-term capital assets only if held for more than 24 months. The shorter 12-month test applies to listed securities such as shares traded on a recognised exchange, so it does not apply to unlisted shares of a private company.
- AMore than 12 months
- BMore than 24 monthsCorrect
- CMore than 36 months
- DMore than 6 months
Explanation
Under the current rules, listed securities become long-term after more than 12 months. Unlisted shares, along with land and buildings, need a holding of more than 24 months. The 12-month option applies to listed shares, so it is wrong for unlisted shares.
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