Definition: According to section 2(14), a capital asset means –
(a) property of any kind held by an assessee, whether or not connected with his business or profession;
(b) any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the SEBI regulations.
However, it does not include—
1. Stock-in trade: Any stock-in-trade [other than securities referred to in (b) above ie. if the nature of such security in the hands of the Foreign Portfolio Investor is stock in trade, the same would be treated as a capital asset and the profit on transfer would be taxable as capital gains], consumable stores or raw materials held for the purpose of the business or profession of the assessee;
2. Personal effects: Personal effects, that is to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him.
3. Rural agricultural land in India i.e., agricultural land in India which is not situated in any specified area (ie. not Urban land. Hence urban agricultural lands constitute capital assets)
(a) property of any kind held by an assessee, whether or not connected with his business or profession;
(b) any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the SEBI regulations.
However, it does not include—
1. Stock-in trade: Any stock-in-trade [other than securities referred to in (b) above ie. if the nature of such security in the hands of the Foreign Portfolio Investor is stock in trade, the same would be treated as a capital asset and the profit on transfer would be taxable as capital gains], consumable stores or raw materials held for the purpose of the business or profession of the assessee;
2. Personal effects: Personal effects, that is to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him.
EXCLUSIONS: ie following Capital Assets
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(a) jewellery;
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(b) archaeological collections;
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(c) drawings;
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(d) paintings;
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(e) sculptures; or
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(f) any work of art.
Land situated within the specified
urban limits, would fall within the definition of “capital asset”, and transfer of such land would
attract capital gains tax -
(i) agricultural land situated in any area within the jurisdiction of a municipality or cantonment board having population of not less than ten thousand according to last preceding census, or
(ii) agricultural land situated in any area within such distance, measured aerially, in relation to the range of population according to the last preceding census
(i) agricultural land situated in any area within the jurisdiction of a municipality or cantonment board having population of not less than ten thousand according to last preceding census, or
(ii) agricultural land situated in any area within such distance, measured aerially, in relation to the range of population according to the last preceding census
4.Specified Gold Bonds: 61⁄2% Gold Bonds, 1977, or 7% Gold Bonds, 1980, or National Defence
Gold Bonds, 1980, issued by the Central Government;
5. Special Bearer Bonds, 1991 issued by the Central Government;
6. Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 or deposit certificates issued under the Gold Monetisation Scheme, 2015 notified by the Central Government.
FOR BUDGET'2018 Impact- http://amzn.to/2nQtbYu
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