Long Term or Short term capital assets considering holding period

[PRIYAM KHAMBHATA]

Respected Sir

My client has sold equity shares on 04/06/2025 and the same has been purchased on 04/06/2024, Now my question is in such sale transaction what type of capital gain Long Term or Short Term would be treated. As per my understanding it would be short term capital gain. Am I right ?

Please guide me for tax treatment

[Eshaan Singal]

If the asset is 112A asset, then its long term. POH will be from 04/06/2024 - 03/06/2025. This is 12 Months. In your case it has exceeded by 1 day. So it's LTCG.

[Ryan Vaz]

Your understanding is correct. The capital gain arising from the sale of equity shares purchased on 04/06/2024 and sold on 04/06/2025 will be treated as a Short Term Capital Gain (STCG). This is because the holding period is exactly 12 months, and for listed equity shares, a holding period of more than 12 months is required for it to be classified as a Long Term Capital Asset. Such STCG, if arising from the sale of listed equity shares on which Securities Transaction Tax (STT) has been paid, will be taxed at a special rate of 15% under Section 111A of the Income-tax Act, 1961.

AI Summary

Capital gains holding period for listed equity shares: whether sale on the anniversary date is short term or long term.
A discussion on whether equity shares bought on 04/06/2024 and sold on 04/06/2025 are short term or long term capital assets. One view states that listed equity shares require a holding period of more than 12 months to qualify as long term, and STCG on STT-paid shares attracts the special rate under section 111A. Another view treats the holding period as having crossed 12 months by one day for section 112A purposes.