Mayur Khetshi Nisar (Practice) (139 Points)
19 April 2010Dear Experts,
If a scrip is purchased on 24th April 2007 and sold on 24th April 2008 (making it 367 days - after considering both days inclusive), will the transaction be considered as short term or long term ?
The relevant section uses the words 12 months.
Regards
Mayur
Amir
(Learner)
(4016 Points)
Replied 19 April 2010
Dear Sir,
More then 365 days will be treated as Long Term.
But few things to consider -
1) DATE OF SALE IS TO BE EXCLUDED
2) As per Boards Circular - Period of holding in case of dematted securities is to be counted from the date of entry and exit in Demat account on FIFO Basis
So if above dates are as per DEMAT Account then YES resultant gain will be Long Term.
Max Payne
(employed)
(2574 Points)
Replied 19 April 2010
There has been a mistake in this post, of serious consequence, go to the next page.
I REQUEST YOU TO IGNORE THE HIGHLIGHTED PORTION
It will be long term since
the holding period is more than 12 months.
The 12th month ends on 23rd april 2008.
SUDHIR & PRADEEP JI
(CA FINAL+LLB + DISA)
(2299 Points)
Replied 19 April 2010
yes it sholud be treateted as long term capital gain because it has been kept with the assessee with more than 365 days .
CA Devanshi Gandhi (Ajani)
(FCA DISA Mcom CIFRS & LLB)
(9060 Points)
Replied 19 April 2010
its long term
CA Punit GoSwaMi
(Chartered Accountant)
(310 Points)
Replied 20 April 2010
yes it is long term...bcoz 12 months completing on 23rd april...
CA Jimmit D Mehta
(Employed)
(494 Points)
Replied 20 April 2010
ya it will be long term as it is more than 12 months
Nitin Grover
(CS)
(1228 Points)
Replied 20 April 2010
Dear Friend
As per your own clarification you are saying that Just take an example a year starts on Jan 01 and ends on December 31
same as in your case Starts on April 24 and ends on April 23.
Regards
Amir
(Learner)
(4016 Points)
Replied 20 April 2010
Hey Friends,
Really sorry but I want to change my opinion.
{Actually my earlier post was not based on the dates (which I overlooked) cos when I read this query where the no. of days was mentioned as 367 and if we exclude the date of sale still it would make 366 Days which is more than an year but I dint realise that in the present case what makes it to 366 days is the fact that 2008 was a Leap year}
So in this case assesee has held the asset exactly for a period of 12 months & to become a Long term Asset Period of holding should EXCEED 12 months.
Hence, The resultant Gain will be Short Term...
Though I was the first one to post a reply to this thread....really sorry for that....
Regds
Amir
Nitin Grover
(CS)
(1228 Points)
Replied 20 April 2010
Dear Amir
Firstly you said More than 365 days and now you r also saying their are 366 days.
and you see yourself a year starts as on Jan 01 and ends on December 31 instead of Jan 01 of next year.
Same here Year cmpleted on April 23
So how it can be a Short Term Capital Gain.
Pls dont get confused see again it and Pls rectify me if I am wrong
Regards
Amir
(Learner)
(4016 Points)
Replied 20 April 2010
Dear Nitin Sir,
I respect ur understanding...and it is correct too............
But to become a Long term Capital Asset period of holding should exceed 12 months...
Now to compute period of holding - Date of sale is to be excluded...
So in the present case Period of holding Starts from 24.04.2007 and ended on 23.04.2008 (cos 24.04.2008 has to be excluded)
1 year ends on 23.04.2008, so this makes exact one year & provisions wants "MORE than a Year" ........
Now just think again & answer.........
CAclubindia
