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 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.