LTCG u/s 54 -Time Period Related

A complex scenario involving gifted properties and long-term capital gains (LTCG)! Key Points 1. *Holding Period*: The holding period for LTCG will indeed be reckoned from 2005, as the plot was purchased by B in that year. 2. *Gifting and LTCG*: There is no specific ruling that requires A to hold the plot for 2 years before gifting it to S for S to avail LTCG benefit. However, it's essential to consider the following: - *Section 49(1)(ii)* of the Income-tax Act, 1961: This section states that when a capital asset is transferred by way of gift, the cost of acquisition and the period of holding shall be taken into account from the date of acquisition by the previous owner (in this case, B). - *Circular No. 2/2017*, dated January 2, 2017: This circular clarifies that the holding period for LTCG will be reckoned from the date of acquisition by the previous owner. Implications for S If S sells the plot before 2 years, the following implications may arise: 1. *Short-Term Capital Gains (STCG)*: If S sells the plot within 2 years from the date of receipt, the gains will be treated as STCG, which will be taxable as ordinary income. 2. *LTCG Benefit*: To avail the LTCG benefit, S will need to hold the plot for at least 2 years from the date of receipt. If S sells the plot after 2 years, the gains will be treated as LTCG, which will be taxable at a lower rate (20% with indexation benefit). Conclusion In summary, there is no specific ruling that requires A to hold the plot for 2 years before gifting it to S for S to avail

Thank you for your opinion.

However if the date of acquition for S be deemed as 2005 then why would he be liable to short term capital gains if he sells before 2 years?