GENERAL MEANING: Capital asset Means property of any kind held by an assessee, whether or not connected with his business or profession (such property con be movable, immovable, tangible, intangible etc).

EXCLUSIONS: Following items NOT be treated as capital assets:

1.                     STOCK-IN-TRADE:

Any stock-in-trade, consumable stores or raw materials held by an assessee for the purposes of his business or profession.

2.                     PERSONAL EFFECTS:

Personal effects refer to movable property held for the personal use of the assessee or any member of his family dependent on him.

Examples: Personal motor car, household furniture, electronic appliances meant for personal use, etc. However, the following assets shall not be treated as personal effects evert though these assets are movable and are held by the assessee for personal use

                   Jewellery and bullion (jewellery includes ornaments of gold, silver, platinum or any other precious metal; precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel);

                   archaeological collections (relating to past/ancient times);

                   drawings & paintings;

                   sculptures; or

                   any work of art.

Note: if items likes motor car, electronic appliances, etc are held for business purposes, they are treated as capital assets.

Note: Silver utensils like thalis, katoris, tumblers, etc held for personal use were held to be personal effects. Thus, no capital gains would arise on sale of such silver utensils v CTT).

Note: Sale of silver coins, gold coins, silver bars, gold utensils, etc used for the purposes of Mahalaxmi Pooja and other festivals was held to be liable to capital gains as such asset did not qualify as personal effects (SC's judgement in the case of Maharaja Rana Hemant Singh v CIT).

3.                     RURAL AGRICULTURAL LAND IN INDIA:

                   Agricultural land outside India: Always a capital asset whether situated in rural area or urban area.

                   Agricultural land in India: Capital asset only if situated in urban area. If situated in rural area, such agricultural land shall not qualify as a capital asset.


Meaning of 'Urban Area'

The following two points define the scope of 'Urban area':

(i)            any area situated within the local limits of a municipality/cantonment board having a population of 10,000 or more;

(ii)          any additional area beyond the local limits of the above mentioned municipality/cantonment board to the extent provided in the table given below

Population of the area as per tie latest census published before the commencement of relevant PY

Shortest aerial distance from the loco, limits of the municipality/cantonment

>                                                                             10,000 and < 1,00,000

2 kilometers

>                                                                      1,00,000 and < 10,00,000

6 kilometers

>                                                                                                       10,00,000

8 kilometers

4.                     Gold Deposit Bonds issued under the Gold be sit Scheme 1999 or issued under the Gold Monetisation Scheme, 2015 notified b the Central Government.

Demo Classes of Tax by Prof. Vinit Sir:

Visit Website:


Latest Blogs

Who is The Best Faculty For Accounts?

You need the Best Faculty For Accounts, CA Exam Preparation, so that you can pass your exam with Flying Colors without wasting a single minute of your Precious Time. A Good Faculty will not only help you clear your exam but also help you achieve the highest rank Possible, which proves to be surely a great advantage in Job Placement after completing CA.

Best Video Lectures for Operations Management & Strategic Management (OMSM) CMA Inter Group-2

OMSM Operations Management and Strategic Management. Get your Video Lectures Operations Management and Strategic Management from COC Education

Top Reviews

Introduction to Statistics for CA Foundation

Introduction to Statistics for CA Foundation Business Mathematics, Logical Reasoning and Statistics is designed as per latest CA Foundation syllabus for Paper 3 to provide a firm grounding in the principles, techniques and practice. The book adopts self-study approach and has been written in student-friendly manner. With a blend of conceptual learning and problem-solving approach, it offers in-depth understanding of the basic mathematical and statistical tools. #introductiontostatistics

Chapter X of Companies Act 2013

Chapter X of Companies Act 2013 The company shall place the matter relating to such appointment for ratification by members at every annual general meeting. ... Under the Act, the provisions for rotation of auditors in the listed Company & certain other class of Companies, have been provided for. #chapterxofcompaniesact2013

Relevant sections under the Companies Act, 2013 dealing with fraud and false statements

Relevant sections under the Companies Act, 2013 dealing with fraud and false statements The new parent corporate law “The Companies Act 2013” is mostly ... I am limiting my write-up to the provisions to the Act, and I request the readers to refer relevant rules, if any, before ... in the 2013 Act is the Section 447 dealing with “Punishment for fraud”. ... Section 448

What is Corporate Image

What is Corporate Image A corporate identity or corporate image is the manner in which a corporation, firm or business enterprise presents itself to the public. The corporate identity is typically visualized by branding and with the use of trademarks, but it can also include things like product design, advertising, public relations etc #WhatisCorporateImage

What is Energy Audit

What is Energy Audit An energy audit is an inspection survey and an analysis of energy flows for energy conservation in a building. It may include a process or system to reduce the amount of energy input into the system without negatively affecting the output. #whatisenergyaudit