As per Section 2(14) of the Income Tax Act, 1961): "Capital asset" means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include—(a) Stock-in-trade, consumable stores, or raw materials held for the purpose of business;(b) Personal effeRead more
As per Section 2(14) of the Income Tax Act, 1961):
See less“Capital asset” means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include—
(a) Stock-in-trade, consumable stores, or raw materials held for the purpose of business;
(b) Personal effects, that is, movable property held for personal use, other than jewelry.”as per above difinartion below is the summary:
Not Included as Capital Assets:
Business-Related Items: Items like inventory, raw materials, or consumable stores that are used in the course of business.
Personal Effects: Generally, personal belongings (like furniture, clothes, etc.) are not considered capital assets—except for jewelry, which is treated as a capital asset.
What Is Included as Capital Assets:
Investment Properties: Land, houses, or commercial properties.
Financial Assets: Shares, mutual funds, bonds, and other securities.
Other Valuable Assets: Items like valuable artworks or collectibles can also qualify, provided they are not held as stock-in-trade.
Section 48 of the Income Tax Act, 1961 provides the basic formula for computing capital gains: Section 48 – Computation of Capital Gains:“The income chargeable under the head ‘Capital Gains’ shall be the difference between the full value of consideration received or accruing from the transfer of a cRead more
Section 48 of the Income Tax Act, 1961 provides the basic formula for computing capital gains:
Note: Although Section 48 does not explicitly define “short-term” or “long-term” capital gains, the classification depends on the holding period prescribed for various asset types under the Act and subsequent notifications.
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