Long Term Vs Short Term Capital Gains Tax: Here Are Key Things You Should Know

By Author: Nishant Arora
Total Articles: 23
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Asset creation is a goal that most of us strive for throughout our lives, working hard to accumulate assets that will enable us to live a stable and comfortable life. Asset generation and distribution are often governed by laws in a social society, with the government maintaining track of them.

The income tax department in India keeps a close eye on assets, and asset owners must pay tax on the assets they own. The purpose of owning assets is to derive financial benefits from them, which can be obtained through sale or lease/rent.


What is a capital asset as per the law?


As per Section 2(14) of the IT Act, 1961:

Capital Assets have been defined as a property of any kind held by an assesses (Taxpayer) whether connected with his business or profession or not.

But excludes the following to be assessed as capital assets:

(i) Any stock-in-trade and raw materials held for the purposes of his business or profession

(ii) Personal effects, i.e., to say, movable property (including wearing apparel and furniture, but excluding ...
... jewellery, archaeological collections, drawings, paintings, sculptures and any work of art) held for personal use by the assesses or any member of his family dependant on him

(iii) Agricultural land in India not being situated within the jurisdiction of a municipality or within 8 km. of a municipality as may be notified

(iv) Gold bonds

(v) Special Bearer Bonds, 1991; and

(vi) Gold Deposit Bonds.

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