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Holding Period of a Capital Asset

Under Income Tax Act taxability of gain on sale of a Capital Asset is decided on the basis of holding period of that asset. Holding period of an asset simply means the time period for which that asset was the property of the owner.

The period from the date of purchase/owning the asset till the sale/transfer of that asset.

Explanation 1 to Section 2(42A) of the Income Tax Act and Rule 8AA of the Income Tax Rules provides for calculating holding period of a capital asset in different scenarios. We have not covered those unique cases here just to keep it simple.

If you have a unique situation to determine period of holding of your capital asset you may write to us at

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