Basic of Capital Asset

Hello Friends,

My this blog is related to tell you about the basic of Capital Asset. 

Meaning of Capital Asset [Sec 2(14)]

Capital Asset is defined to include:

a) Any kind of property held by an assessee, whether or not connected with business or profession of the assessee. It includes every kind of assests, movable or immovable, tangible or intangible

b) Any securities held by a FII which has invested in such securities in accordance with the regulations made under the SEBI Act, 1992.

However, the term ‘capital asset’ shall exclude the following:

• Stock-in-trade, consumable stores, raw materials held for the purpose of business or profession;

• Movable property held for personal use of taxpayer or for any member of his family dependent upon him. However, jewellery, costly stones, and ornaments made of silver, gold, platinum or any other precious metal, archaeological collections, drawings, paintings, sculptures or any work of art shall be considered as capital asset even if used for personal purposes;

• Specified Gold Bonds 

• Special Bearer Bonds;

• Agricultural Land in India, not being a land situated:

a. Within jurisdiction of municipality, notified area committee, town area committee, cantonment board and which has a population 10,000 or more;

b. Within range of 8 KMs distance measured aerially from the local limits of any municipality or cantonment board.

• Deposit certificates issued under the Gold Monetisation Scheme, 2015

Categories of Capital Assets

 

A. Short Term Capital Asset

Capital asset held for not more than 36 months immediately prior to the date of transfer shall be deemed as short-term capital asset. However, following assets held for not more than 12 months shall be treated as short-term capital assets:

a) Equity or preference shares in a company which are listed in any recognized stock exchange in India;

b) Other listed securities;

c) Units of UTI;

d) Units of equity oriented funds; or

e) Zero Coupon Bonds.

Note: Unlisted shares and immovable property (being land or building or both)held for not more than 24 months immediately prior to the date of transfer shall be treated as short-term capital asset.

B. Long Term Capital Asset

Capital Asset that held for more than 36 months or 24 months or 12 months, as the case may be, immediately preceding the date of transfer is treated as long-term capital asset.

I hope it will be helpful to you.

Thanks & Regards

Kulvinder Kaur

B.Com(H), MBA(Finance)

9871580806,8826566751

rightsteptoinvest@gmail.com