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Capital gain

Santosh Kumar (1 Points)

12 October 2020

differences between long term capital gain and short term capital gain

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prasad Nilugal (3914 Points)
Replied 12 October 2020

Asset sold after 2 year's long term capital Gain , lf sold before 2 year's short term capital Gain .In case of financial Assets it's 1 Year .

ayusmita (Tax consultant) (5885 Points)
Replied 12 October 2020

Short term capital gain are those gain which we get after selling a capital asset which we owned for a year or less than a year
and long term capital gain are those gain which we get after selling of capital asset which we owned more than a year

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rama krishnan (12234 Points)
Replied 12 October 2020

Short term capital gain arises on sale of short term capital asset. I similarly long term capital gain arises on sale of long term capital asset.
short term capital asset - holding period less than 2 years (for listed shares debentures 1 years)
long term capital asset - holding period 2 years or more

Prajakta (Student CA IPC / IPCC) (89 Points)
Replied 13 October 2020

As per section 2(42A) of income tax act, Any asset held for a period not more than 36 months is short term capital asset..
so an asset held for more than 36 months is long term asset and any gain arising on that is Long term capital gain

prasad Nilugal (3914 Points)
Replied 13 October 2020

Yes @ prajakta is correct , It's not 2 year's ,it's 3 years .

Prajakta (Student CA IPC / IPCC) (89 Points)
Replied 13 October 2020

Thanks @ prasad nilugal..
@ Santosh Kumar..
there are certain exceptions of this general rule of 36 months... so it depends on the asset that you are holding that what will be the period of holding for classification..
For following asset it is 12 months -
Listed security, unit of equity oriented fund/uti and ZCB.
and for following assets it is 24 moths
Unlisted shares and land or building or both..

prasad Nilugal ( GST Practitioner & Accounts ) (14221 Points)
Replied 13 October 2020

yes @ prajakta

section 2(42A) 3rd proviso amended in finance act 2018 from 12 months to 24 months for share of company not being listed and immovable property land and building .