Short-term Capital Asset – Section 2(101)(a) | Income-tax Act, 2025 vs 1961

§ 2(101)(a) · Income-tax Act, 2025

Short-term capital asset

ITA 2025 · 2(101)(a) ITA 1961 · 2(42A)
Definition — Section 2(101)(a)

Means a capital asset held by an assessee for not more than 24 months immediately preceding the date of its transfer. However where the capital asset is: (1) a security listed in a recognised stock exchange in India; (2) a unit of the Unit Trust of India; (3) a unit of an equity-oriented fund; or (4) a zero coupon bond — the threshold is reduced to 12 months instead of 24 months. Special rules under Section 2(101)(c) apply for determining the holding period in cases of inherited assets, assets acquired through amalgamation or demerger, demutualisation of stock exchanges, and other specified circumstances where the holding period of the previous owner or previous asset is included.

Act Comparison
Income-tax Act, 2025
2(101)(a)
Short-term capital asset
Income-tax Act, 1961
2(42A)
Short-term capital asset
Key Points
  • Maps to Section 2(42A) of the 1961 Act
  • Short-term gains are taxed at normal slab rates or 20% for STT-paid equity
  • Holding period starts from the date of acquisition and ends on the date of transfer
💡 Practical Note

For unlisted shares and immovable property, the holding period is 24 months — a common point of confusion since equity uses a 12-month threshold.

Published by Simplified Tax India — Clear, section-wise comparison of Income-tax Acts. ← Back to Section 2 Definitions Table
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