Clause - 003 - Amendment of section 2.

THE FINANCE BILL, 2017

The existing provisions contained in clause (42A) of the said section defines the expression "short-term capital asset"

It is proposed to amend clause (i) of the said Explanation to insert clause (hg) so as to provide that in the case of a capital asset, being a unit or units, which becomes the property of the assessee in consideration of a transfer referred to in clause (xix) of section 47, there shall be included the period for which the unit or units in the consolidating plan of the mutual fund scheme were held by the assessee.

 

Short-term capital asset definition expanded to include prior holding period of units in a consolidating mutual fund plan. The amendment expands the definition of short-term capital asset by providing that where units become the assessee's property in consideration of a specified transfer, the period for which those units were held by the assessee in the consolidating mutual fund plan shall be included in computing the holding period for determining short-term or long-term status.