As per S. 2(14) of the Income Tax Act, 1961, unless the context otherwise requires, the term ‘capital asset’ means:
(a) property of any kind held by an assessee, whether or not connected with his business or profession;
(b) any securities held by 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 (15 of 1992),
(c) any unit linked insurance policy to which exemption under clause (10D) of section 10 does not apply on account of the applicability of the fourth and fifth provisos thereof,
but does not include-
(i) any stock-in-trade [other than the securities referred to in sub-clause (b)], consumable stores or raw materials held for the purposes of his business or profession;
(ii) 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 exclude,-
(b) archaeological collections;
(e) sculptures; or
(f) any work of art.
Explanation 1: For the purposes of this sub-clause, “jewellery” includes-
(a) 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 stone, and whether or not worked or sewn into any wearing apparel;
(b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel.
(iii) agricultural land in India, not being land situate-
(a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand ; or
(b) in any area within the distance, measured aerially,-
(I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or
(II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or
(III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh.
Explanation: For the purposes of this sub-clause, “population” means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year;
(iv) 6½ per cent Gold Bonds, 1977, or 7 per cent Gold Bonds, 1980, or National Defense Gold Bonds, 1980, issued by the Central Government;
(v) Special Bearer Bonds, 1991, issued by the Central Government;
(vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 or deposit certificates issued under the Gold Monetisation Scheme, 2015 notified by the Central Government.
Explanation 1: For the removal of doubts, it is hereby clarified that “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 or any other rights whatsoever.
Explanation 2: For the purposes of this clause-
(a) the expression “Foreign Institutional Investor” shall have the meaning assigned to it in clause (a) of the Explanation to section 115AD;
(b) the expression “securities” shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).
Whether the Agricultural land situated under the jurisdiction of village Panchayat having population less than 10000 will fall under the definition of Capital Asset for the purpose of taxability of Capital Gains or the same will be completely exempt from Capital Gains Tax?
exempt, provided distance condition is also satisfied.
Which distance have to measure from municipality to agricultural land by road as a “kilometers” or by air “aerial” distance ?
Wording of this section not clear. Distance aerially between local limit of municipality or cantonment board to agricultural land or from local limit of municipality to local limit of city/ village where this agricultural land situated?
Logically…. ‘Aerially’ means Straight… !!
whether the leased assets can be termed as ‘capital asset’?
If Assets purchased out side India, like Shares of foreign company, are treated as capital assets under definition of 2(14) in case the assessee is Resident Indian?
Are gold biscuits and coins included in jewellery?
Does sale of Rural dry agricultural land, where agricultural activities are not being carried out from last 5 years due to feasibility issues, attracts capital gains? This is assigned land and is under possession for more than 20 years. This is under village Panchayat with population less than 10000.
Agriculture land situated under village panchayat having population under 10000 and aerial distance from municipal limits is less than 2 kms. Will it be capital asset or Rural Agriculture Land ?