Period of holding of unlisted shares to qualify as a long-term capital asset to be reduced from “more than 36 months” to “more than 24 months” [Section 2(42A)] Effective from: A.Y.2017-18 :

(i) Section 2(42A) defines a short-term capital asset to mean a capital asset held by an assessee for not more than 36 months immediately preceding the date of its transfer.

(ii) Section 2(29A) defines a long-term capital asset to mean a capital asset which is not a short-term capital asset. Therefore, a capital asset held by an assessee for more than 36 months immediately preceding the date of its transfer would be a long-term capital asset.

(iii) Third proviso has been inserted in section 2(42A) with effect from A.Y.2017-18 to provide that a share of a company (not being a share listed in a recognized stock exchange in India) would be treated as a short-term capital asset if it was held by an assessee for not more than 24 months immediately preceding the date of its transfer.

(iv) Thus, the period of holding of unlisted shares for being treated as a long-term capital asset has been reduced from “more than 36 months” to “more than 24 months” from A.Y.2017-18.