Wednesday, 18 November 2009

Long Term Capital Gains - Date calculation

Q. - Dear Sir, I had sold shares exactly after one year i.e. date of purchase 9.10.2008 and date of sale 9.10.2009. Capital gain earned on this is short term or long term? I am a NRI and my bank has deducted TDS on this capital gain stating that it is a short term gain and I should have hold the shares atleast for one more day. Your guidance shall be highly appreciated. Regards - Haresh Bilakhia...

Ans. - Dear Bilakhia, I`m not at all agree with the view taken by ur Bank. Sample this -

Purchase date - 9 oct 2008
12 months completes on - 8 oct 2009 (by the midnight of 8th oct 2009 i.e. 12AM for 9 oct 2009)

since the holding periods exceeds the 12 months period (no matter the period is few days or few Hrs.), in my opinion ut Gains r LTCG & as the STT was paid,u r eligible for Tax free LTCG.

Bank is not right to ask for completion of 1 more day to be eligible for tax free LTCG.