Shares not listed in India

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Renuka Prasad.R

Renuka Prasad.R (Querist)
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24 August 2009 What is the period for shares not listed in India to be considered as Long Term Capital Asset?

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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24 August 2009 1 Year

Renuka Prasad.R

Renuka Prasad.R (Querist)
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24 August 2009 is it not 3 years? Because shares listed outside the country will not be considered as financial instruments.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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25 July 2025 Great question — and your understanding is **almost correct**, but let's clarify it precisely as per the **Indian Income Tax Act**.

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## ✅ 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**.

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### 📌 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**.

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## ✅ 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 |

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### 📖 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.

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## ✅ 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.

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Let me know if you’d like an example calculation for LTCG on foreign/unlisted shares.

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