InvestorQ : How is the holding period calculated in case of STCG and LTCG?
Debbie Mascarenhas made post

How is the holding period calculated in case of STCG and LTCG?

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Crowny Pinto answered.
2 years ago
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For an investor, the taxation difference between LTCG and STCG is quite huge. If you sold stocks 360 days from when you had bought, you would have to pay 15% of all gains as taxes on STCG. The same stock if held for 5 days more (1 year or 365 days), the entire gain would be exempt from taxation as it would be LTCG now. This is critical because in case of LTCG, not only is the tax lower but you also get a basic exemption of Rs.1 lakh, which is not available in case of STCG.

It becomes imperative that you as an investor keep a tab on the number of days since you purchased your stock holdings. If you have purchased the same stock multiple times during the holding period, then the period will be determined using FIFO (First in First out) method. Hence it needs to be remembered that the calculation is done on a point to point basis, rather than based on month or number of days.
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