India Tax & Regulatory
Long-Term vs Short-Term Capital Gains on Share Sale
Shares held over 24 months qualify for lower long-term capital gains tax versus higher short-term rates — sellers should time their exit around this holding-period threshold wherever feasible.
Seller Example
Promoter of a Mumbai auto components company holding shares for 22 months delays signing definitive documents by 10 weeks to cross the 24-month long-term holding threshold, cutting the effective tax rate on ₹40 Cr of gains and improving net take-home by roughly ₹3–4 Cr versus an immediate short-term-taxed exit.