NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Equity Products
Under the Income-tax Act as applicable to listed equity shares, what is the minimum holding period after which a gain on sale of a listed equity share on a recognised stock exchange is treated as a long-term capital gain?
Listed equity shares are long-term capital assets if held for more than 12 months before sale. A gain on shares sold within 12 months is short-term. The 24-month and 36-month periods apply to other asset classes, not listed shares.
- AMore than 12 monthsCorrect
- BMore than 24 months
- CMore than 36 months
- DMore than 6 months
Explanation
Listed equity shares become long-term capital assets when held for more than 12 months. Periods of 24 months apply to unlisted shares and immovable property, and 36 months was the older general rule for other assets. Six months is not the current threshold for listed shares.
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