Saturday, 13 February 2016

Long term Capital Gain time frame for Unlisted Shares

Industry trackers say that the issue arose after representations were made that investment in unlisted companies be treated on a par with those in listed space. By that the contention was that there would be no tax on investments in unlisted companies if the investment is held for a year.

"The industry wants the government to clarify the law for unlisted shares and explicitly reduce the holding period for unlisted shares from 3 years to 1 year," said Rajesh H Gandhi, partner, tax, Deloitte Haskins & Sells."Given that market participants are acutely sensitive to tax policy changes, any review of the policy should be calibrated, backed by a broader medium to longterm policy objective and should follow extensive stakeholder consultation," said Sameer Gupta, partner and leader, financial services, tax and regulatory.

Currently India has a double taxation avoidance treaty (DTAA) with Mauritius and Singapore, which effectively means investors coming through the route are exempted from most taxes. Though this too may be nearing to an end due to the changing regulatory environment in India and globally.

Sandip Ginodia , Director 

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