Meaning of short term capital asset is given under Section 2(42A) of Income Tax Act . Lets discuss and analyse its meaning as under :-
SHORT TERM CAPITAL ASSET – SECTION 2(42A) : –
- Short term capital asset is a capital asset held by an assessee for 36 months or less immediately preceding the date of its transfer (subject to exceptions).
Period of holding would be considered as 12 months instead of 36 months for following assets, to ascertain if they are short term assets:
- Listed shares
- Other listed securities (like listed debentures, bonds, government securities, derivative, etc .)
- Units of UTI (listed or unlisted)
- Units of Equity oriented mutual funds (listed or unlisted)
- Zero coupon bonds (listed or unlisted)
- These Assets would be considered as short-term capital asset if they are held for 12 months or less immediately preceding the date of transfer:
NOTE : – In case of debt oriented mutual funds, normal period of holding of 36 months will be considered .
- Period of holding would be considered as 24 months instead of 36 months for following assets, to ascertain if they are short term assets : –
- Unlisted Equity shares
- Unlisted Preference shares
- Immovable property (Land or building) – AY 2018-19 onwards
- Thus, unlisted shares and immovable property would be considered as short-term capital assets if they are held for 24 months or less immediately preceding the date of transfer
SHORT TERM CAPITAL GAINS & LONG TERM CAPITAL GAINS – PERIOD OF HOLDING
PERIOD OF HOLDING OF SHARES ACQUIRED ON REDEMPTION OF GLOBAL DEPOSITORY RECEIPT
- Where share(s) of a company are acquired by the non-resident assessee on redemption of Global Depository Receipts [referred to in Section 115AC(1)(b)] held by such assesse, the period of holding of such shares shall be reckoned from the date on which the request for such redemption was made .