NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Taxation (NISM XXI-A)
Under the Indian tax regime, the tax rate on capital gains from listed equity shares depends mainly on which of the following?
The holding period decides it. Listed shares held beyond the prescribed period of 12 months give long-term capital gains, while shorter holdings give short-term gains, each with its own rate. Fee structure, corpus size and trade frequency do not determine the category.
- AThe holding period of the shares before saleCorrect
- BThe fee structure chosen with the portfolio manager
- CThe size of the PMS corpus invested
- DThe number of trades done in the account in a month
Explanation
Listed equity shares held beyond the prescribed holding period (12 months) are long-term, and shorter holdings are short-term. Each category has its own tax rate. Fee structure, corpus size and trade count do not decide the capital gains category.
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