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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Capital Gains

Under the Indian Income-tax law, which of the following is treated as a long-term capital asset when sold by a resident individual, based purely on the holding period for a listed equity share?

A listed equity share becomes a long-term capital asset when it is held for more than 12 months before transfer. Gains on shares held for 12 months or less are short-term. The 24-month test applies to unlisted shares and land or buildings, not to listed shares.

  1. AHeld for more than 12 months before transferCorrect
  2. BHeld for more than 24 months before transfer
  3. CHeld for more than 36 months before transfer
  4. DHeld for more than 6 months before transfer

Explanation

A listed equity share is a long-term capital asset if held for more than 12 months. The 24-month period applies to unlisted shares and immovable property, and 36 months was the older general rule. 6 months is not a current threshold for listed shares.

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