CAPITAL ASSETS AND ITS TYPES

S.NO

Capital Asset Means:

1.     

Property of any kind held by assessee, whether or not connected with business or profession.

2.     

Any Securities held by a Foreign Institutional Investor (FII),

But capital Asset does not include (excludes):

                                       i.          Stock in trade (RM/ WIP/ FG).

               ii.          Moveable personal asset (used by assessee or dependent family member for personal purpose). But excludes: Jewellery, Drawings, Paintings, Sculpture, Archaeological Collection, or Any other art of work.

                              iii.          Rural Agriculture land in India.

                       iv.          Gold Deposit Bonds, 1999 or Deposit certificates issued under the Gold Monetisation Scheme, 2015 (Interest on this instrument also exempt u/s 10(15)).

3.     

ULIP’s to which exemption u/s 10(10D) does not apply due to fourth and fifth proviso thereof.

NOTE NO.

EXPLANATION

1.     

Asset used for personal purpose of assessee: –

·      T.V, Car, Mobile etc. – Not a Capital Asset – Capital Gain not Applicable.

·      Jewellery, Drawings, Paintings – Capital Asset – Capital Gain is Applicable.

2.     

Gold Utensils, Silver Bars, Silver Coins were held not be considered as Personal Effect – Capital Gain Applicable (Maharaja Rana Hemanth Singh).

3.     

Silver Utensils held to be Personal Effect – No Capital Gain (Benarshilal Kataruka).

4.     

Car used in business is  to be treated as Capital Asset.

5.     

Jewellery means:

               i.          Ornaments made of gold, silver, platinum or other precious metal or alloy containing such metals.

              ii.          Precious stones whether or not set in any furniture, utensil or other article.

6.     

Rural area:

Rural area means which is not an urban area.

Urban area:

Urban area means:

                         i.          Any area (municipality, cantonment board etc.) which has a population of 10,000 or more.

             ii.          In the following area within the distance, measured aerially.

7.     

“Property” also includes any rights in relation to an Indian Company including right of management or control or any other right whatsoever.

S.NO

TRANSFER INCLUDES

1.     

The Sale, exchange, or relinquishment of the asset, or

2.     

The extinguishment of any right there in, or

3.     

Compulsory Acquisition there of under any law, or

4.     

Conversion of capital asset into stock in trade, or

5.     

Allowing the Possession of any immoveable property to be taken or retained in part performance of a contract.

6.     

Any transactions (like becoming a member of or acquiring shares in a Co. operative society) which has the effect of transferring or enabling the enjoyment of immoveable property.

7.     

The redemption of Zero-coupon bonds (ZCB).

NOTE:

“Transfer also includes disposing of or parting with an asset or interest therein or creating any interest in any asset in any manner whatsoever either directly or indirectly, absolutely or conditionally voluntarily or involuntarily by way of an agreement or otherwise.

Capital Asset

Period of Holding

Upto 22/07/2024

From 23/07/2024

Part: A

·      Security (other than unit*) listed in recognized stock exchange of India.

·      Unit of UTI

·      Unit of Equity oriented Mutual Fund

·      Zero Coupon Bonds

1 YEAR

1 YEAR

Part: B

·      Unlisted shares (shares not covered above)

·      Immoveable Property.

2 Years

2 years

Part: C

·      Any other Assets

3 Years

2 Years

* “other than unit” is omitted w.e.f. from 23^rd July 2024, so now in case of listed units Period of Holding 1 Year will be applicable from 23^rd July 2024. (E.g. Listed Business trust units).

If any asset held for more than 1/2/3 years, then it is treated as Long Term Capital Gain otherwise Short Term Capital Gain.

PRODUCT

TAX ON STCG

TAX ON LTCG

BEFORE

AFTER

BEFORE

AFTER

Listed equity shares.

(STT Paid)

15%

20%

10% on gains above Rs 1 Lakhs

12.5% on gains above Rs 1.25 Lakhs

Unlisted equity shares

Slab Rate

Slab rate

20% with indexation

12.5% without indexation

Listed Preference shares

Slab Rate

Slab rate

20% with indexation or 10% without indexation.

12.5% without indexation

Unlisted preference shares

Slab Rate

Slab rate

20% with indexation

12.5% without indexation

Equity Mutual Funds (stt paid)

15%

20%

10% on gains above Rs 1 Lakhs

12.5% on gains above Rs 1.25 Lakhs

Equity Mutual Funds ( if stt not paid)

Slab Rate

Slab rate

20% with indexation

12.5% without indexation

Sovereign Gold Bonds (listed)*

Slab Rate

Slab rate

20% with indexation or 10% without indexation.

12.5% without indexation

Any bonds listed

Slab Rate

Slab Rate

10% without indexation

12.5% without indexation

Specified Mutual Fund (debt)

Slab Rate

Slab Rate

20% with indexation

12.5% without indexation

Other Mutal Funds (gold funds, overseas funds)

Slab Rate

Slab Rate

20% with indexation

12.5% without indexation