Income from sale of unlisted equities to be treated as capital gains

CBDT has said income from sale of unlisted equities would be treated as capital gains in a move that gives significant relief to private equity, offshore and alternative investment funds. The holding period of unlisted equity shares for long term taxation has been reduced to 24 months from 36 months by Finance Act, 2016 The directive puts to rest the debate over treatment of income from sale of unlisted shares as capital gains or business income. This also gives certainty to foreign investors taking advantage of favorable tax treaties such as India Mauritius.