Photo: iStock
Photo: iStock

What is a long-term capital asset?

In case of shares, if they are held for more than a year, they are considered LTCA

Depending on the holding period by the seller, assets are segregated as short-term or long-term capital assets. Each asset has a different period of holding stipulated under the Income tax Act, 1961 to be qualified as LTCA.

For instance, in case of shares, if they are held for more than a year, they are considered LTCA. Similarly, in case of property and jewellery, the holding period for the assets to qualify as LTCA is two and three years, respectively.

Any gains from transfer of LTCA attract long-term capital gains (LTCG) tax, the quantum of which is different for different assets.

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