Shares not listed in India
This query is : Resolved
Renuka Prasad.R
(Querist)
24 August 2009
What is the period for shares not listed in India to be considered as Long Term Capital Asset?
24 August 2009
1 Year
Renuka Prasad.R
(Querist)
24 August 2009
is it not 3 years? Because shares listed outside the country will not be considered as financial instruments.
25 July 2025
Great question — and your understanding is **almost correct**, but let's clarify it precisely as per the **Indian Income Tax Act**.
---
## ✅ Capital Gains Holding Period for Shares **Not Listed in India**
### 🔹 **Unlisted Shares** (including those listed outside India)
* As per Indian tax law:
* **Unlisted shares** are considered **long-term capital assets** \*\*only if held for more than ***24 months***.
* This rule applies **regardless of where the shares are listed (or not listed)**, including **foreign stock exchanges**.
---
### 📌 So, the correct answer is:
> 🔸 **24 months** is the holding period for shares **not listed on a recognized stock exchange in India** to be treated as **long-term capital assets**.
---
## ✅ Summary Table:
| Type of Share | Long-Term Holding Period |
| ------------------------------------- | ------------------------ |
| Listed shares in India | > 12 months |
| **Unlisted shares (India or abroad)** | > 24 months |
| Units of equity mutual funds | > 12 months |
| Other capital assets (generally) | > 36 months |
---
### 📖 Relevant Section:
* **Explanation 1(i)(e)** to **Section 2(42A)** of the Income Tax Act defines the period of holding for **unlisted shares** as **more than 24 months** for LTCG.
---
## ✅ Tax Treatment:
* **Long-Term Capital Gains (LTCG)** on **unlisted shares**:
* Taxed at **20% with indexation** under **Section 112**
* **Short-Term Capital Gains (STCG)**:
* Taxed at your **applicable slab rate**
> Note: If shares are in a **foreign company**, **foreign exchange fluctuation** rules under **Section 48 (first proviso)** may apply for capital gains computation.
---
Let me know if you’d like an example calculation for LTCG on foreign/unlisted shares.
---
## ✅ Capital Gains Holding Period for Shares **Not Listed in India**
### 🔹 **Unlisted Shares** (including those listed outside India)
* As per Indian tax law:
* **Unlisted shares** are considered **long-term capital assets** \*\*only if held for more than ***24 months***.
* This rule applies **regardless of where the shares are listed (or not listed)**, including **foreign stock exchanges**.
---
### 📌 So, the correct answer is:
> 🔸 **24 months** is the holding period for shares **not listed on a recognized stock exchange in India** to be treated as **long-term capital assets**.
---
## ✅ Summary Table:
| Type of Share | Long-Term Holding Period |
| ------------------------------------- | ------------------------ |
| Listed shares in India | > 12 months |
| **Unlisted shares (India or abroad)** | > 24 months |
| Units of equity mutual funds | > 12 months |
| Other capital assets (generally) | > 36 months |
---
### 📖 Relevant Section:
* **Explanation 1(i)(e)** to **Section 2(42A)** of the Income Tax Act defines the period of holding for **unlisted shares** as **more than 24 months** for LTCG.
---
## ✅ Tax Treatment:
* **Long-Term Capital Gains (LTCG)** on **unlisted shares**:
* Taxed at **20% with indexation** under **Section 112**
* **Short-Term Capital Gains (STCG)**:
* Taxed at your **applicable slab rate**
> Note: If shares are in a **foreign company**, **foreign exchange fluctuation** rules under **Section 48 (first proviso)** may apply for capital gains computation.
---
Let me know if you’d like an example calculation for LTCG on foreign/unlisted shares.
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