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Computation Of ‘Period Of Holding for Computing Gapital Gain

 

Normally, the period of holding implies the period for which the asset is owned by an assessee or held by an assessee as owner. It starts from the day when the asset is acquired by the assessee and ends on the day when it is sold/disposed off/transferred otherwise. Under capital gains, the period of holding of capital asset before the date of transfer is important to determine the nature of capital gain i.e. short team/long team capital gain. Hence, the day on which capital asset is transferred is not to be counted in the period of holding. Thus, if a capital asset is acquired by an assessee on April 1, 2011, the period of holding of 12 months/36 months shall be completed on March 31, 201 2/March 31, 2014.

However, in certain specified cases, the period of holding shall be calculated after including! excluding certain period as provided therein. These cases are as follows :

(i)      Shares held in a company in liquidation. While calculating period of holding of shares, the period subsequent to the date on which the company goes into liquidation is to be excluded.

(ii)     Capital asset acquired by specified modes mentioned in Section 49(1). In the case of a capital asset which becomes the property of an assessee in the circumstances mentioned in section 49(1) i.e. under gift, will, succession, inheritance etc., the period for which the asset was held by the previous owner shall be included.

(iii)    Shares acquired in Indian amalgamated company. In the case of a share in an Indian company which becomes the property of the assessee in a scheme of amalgamation, the period for which the share in the amalgamating company was held by the assessee shall be included.

(iv)    Shares acquired in Indian resulting company. In the case of a share in an Indian resulting company which becomes the property of the assessee in a scheme of demerger, the period for which the share in the demerged company was held by the assessee shall be included.

(v)     Trading or clearing rights or shares. In the case of a capital asset, being (i) trading or clearing rights of recognised stock exchange in India acquired or (ii) equity shares or shares in a company allotted by a person pursuant to demutualisation or corporatisation of the recognised stock exchange in India [as referred to in section 47(xiii)], there shall be included while calculating the period of holding of trading or clearing rights, the period for which the person was a member of the recoginsed stock exchange in India immediately prior to such demutualisation or corporatisation

(vi)    Specified security or sweat equity shares. In the case of a capital asset, being any specified security or sweat equity shares, allotted or transfered directly or indirectly, by the employer free of cost or at concessional rate to his employees (including former employees), the period shall be counted from the date of allotment or transfer of such specified security or sweat equity shares.
 
More Topics ... @ ' Capital Gain'

Capital Gain , Capital Assets & Property for Computing Capital Gain
Types of Capital Assets for Computing ‘Capital Gain’
Types of Capital Gains for Computing ‘Capital Gain’
Computation Of ‘Period Of Holding
 Transfer Of A Capital Asset [Section-2(47)]
Transactions Not regarded as ‘Transfer’ [Section-47]

Capital Gain is Deemed to be the Income of the Previous Year
Amount Received from insurer [Section-45(1A)] for Computing Capital Gain
Transfer of Capital Assets by a person to firm, AOP or Body Of Individuals (BOI) [Section 45(3)] for Computing Capital Gain
 Enhancement of Compensation on Compulsory Acquisition of Assets [Section-45(5)] for Computing Capital Gain
Sale of units Purchased for Deduction U/s 80 CCB [Section-45(6)]
Distribution of Assets by A Company in Liquidation for Computing Capital Gain
Capital Gain on Purchase by A Company of its Own Shares or Other  Securities [Section 46A]
DEEMED CAPITAL GAIN [Section 47A]
Method of Computing Capital Gain [Section 48]
Expenses Disallowed u/s Section 48 for Computing Capital Gain
Cases in which the Indexation of Cost is not to be done while Calculating long Term Capital Gain
 Computation of Capital Gain in Case of Non-Residents [Sec. 48 Proviso 1 ]
Determination of Cost of Acquisition for Computing Capital Gain.
Taxation of Gain on ‘Slump Sale’ for Computing Capital Gain
Special Provision for full Value of Consideration in certain cases (Section 50C] for Computing Capital Gain
Treatment of Advance Money Received and Forfeited (Section-51] for Computing Capital Gain
Cost of Acquisition of Goodwill [Section-55(2)(a)] for Computing Capital Gain
Cost of Acquisition of Shares [Section 55 (2) (v)] for Computing   Capital Gain
Capital Gains Exempted u/s 10
Capital Gains—Exempted u/s 54
 Capital Gain on Transfer of Self-Cultivated Agricultural Land in Urban   Areas [ Section 54 B]
Capital Gains on Compulsory Acquisition Of Land And Buildings [Section 54D]
 Capital Gain on Transfer of any Long Term Capital Asset [Section-54EC]
Exemption of Capital Gain on Transfer Of Long-Term Capital Assets in case of Investment In Residential House [Section 54F]
Capital Gain on Shifting of Industrial Undertaking from Urban Areas to Non-Urban Areas [Section 54G]
 Exemption of Capital Gain on transfer of assets in case of shifting of Industrial Undertaking from an urban area to any Special Economic Zone (SEZ) [Sec. 54GA]
Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]
Reference to Valuation Officer [Section 55] towards Capital Gain
 TREATMENT OF CAPITAL LOSS [Section 74]
TAX ON CAPITAL GAINS

 
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