Meaning of Capital Asset - Section 2(14) - Income Tax - Ready Reckoner - Income Tax

Section 2(14): Meaning of Capital Assets Capital asset means Property of any kind held by an assessee, whether or not connected with his business or profession; [ Any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the SEBI Act, 1992 any securities held by (i) a Foreign Institutional investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992; or (ii) an investment fund specified in clause (a) of Explanation 1 to section 115UB which has invested such securities in accordance with the provisions of the regulations made under the Securities and Exchange Board of India Act, 1992 or the International Financial Services Centres Authority Act, 2019; w.e.f. 01.04.2026 substituted vide Section 3 of the Finance Act, 2025 ] Any Unit linked policy to which exemption u/s 10(10D) does not apply [ on account of the applicability of the fourth and fifth proviso thereof w.e.f. 01.04.2026 omitted vide Section 3 of the Finance Act, 2025 ] . but does not include - Any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession 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, but excludes Jewellery Archaeological collections Drawings Paintings Sculptures or Any work of art (Hence (a) to (f) are capital assets) Notes: Jewellery Means is a capital asset and the profit or gains arising from the transfer of jewellery held for personal use are chargable to tax under the head of capital gains. For this purpose, the expression jewellary includes this following Ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi - precious stones and whether or not worked or sewn into any wearing apparel. precious or semi-precious stones and whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel. Silver Utensils constitute personal effects Sale of gold bars etc. used for puja attracts capital gains since these are not personal effects Gold Utensils do not constitute personal effects. Agricultural land in rural area in India : Rural area for the above purpose is as follows - Form the Assessment year 2014-15 - Any area which is outside the jurisdiction of a municipality or cantonment board having a population of 10,000 or more and also which does not fall within distance (to be measured aerially) given below 2 km from the local limits of municipality / cantonment board If the population of the municipality / cantonment board is more than 10,000 but not more than 1,00,000. 6 km from the local limits of municipality / cantonment board If the population of the municipality / cantonment board is more than 1,00,000 but not more than 10,00,000. 8 km from the local limits of municipality / cantonment board If the population of the municipality / cantonment board is more than 10,00,000 Gold deposit bonds issued under the Gold Deposit Scheme, 1999, or deposit certificates issued under the Gold Monetisation Scheme, 2015 and 2019 notified by the Central Government. 6.5% Gold Bonds, 1977, 7% Gold Bonds, 1980 or National Defence Gold Bonds, 1980 issued by the CG. Special Bearer Bonds, 1991, issued by Central Government Note: Property includes and shall be deemed to have always included any rights in or in relation to an Indian Company, including rights of management or control. Example Sr. No. Area Shortest aerial distance from the local limits of a municipality or cantonment board referred to in Item (a) Population according to the last preceding census of which the relevant figures have been published before the first day of the previous year. Is the land situated in this area a capital assets? (i) A 1 KMs 9,000 No (ii) B 1.5 KMs 12,000 Yes (iii) C 2 KMs 11,00,000 Yes (iv) D 3 KMs 80,000 No (v) E 4 KMs 3,00,000 Yes (vi) F 5 KMs 12,00,000 Yes (vii) G 6 KMs 8,000 No (viii) H 7 KMs 4,00,000 No. (ix) I 8 KMs 10,50,000 Yes (x) J 9 KMs 15,00,000 No