NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Taxation
Which of the following is the correct holding period for a unit of an equity-oriented mutual fund to be classified as a long-term capital asset?
Units of an equity-oriented mutual fund are treated as long-term capital assets when held for more than 12 months. If sold within 12 months, the gain is a short-term capital gain taxed at the special short-term rate applicable to equity funds.
- AMore than 36 months
- BMore than 24 months
- CMore than 12 monthsCorrect
- DMore than 6 months
Explanation
Units of equity-oriented funds listed or otherwise are long-term if held for more than 12 months. Gains on units held for 12 months or less are short-term capital gains.
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