Meaning of Capital Asset, Types of Capital Assets and Meaning of Transfer & Clubbing of Income

Meaning of Capital Asset, Types of Capital Assets and Meaning of Transfer & Clubbing of Income

1. Meaning of Capital Asset, Types of Capital Assets and Meaning of Transfer & Clubbing of Income Made By:- Dhrumil Shah SY BBA Div 1 Roll No. 400038

2. Capital Asset It includes all kinds of properties, whether movable or immovable, tangible or intangible, whether related to business or not. Excludes: Stock-in-trade or Raw material held for business or profession Only movable property held for personal or for use of family members 2

3. Agricultural land in India provided it is not situated : In any area within any Municipal Corporation having population 10,000 or more In any notified area 6 ½% gold bond 1977, 7% gold bond 1980 and National Defense Gold Bond 1980 Special bearer bond 1991 Gold deposit bonds issued under gold deposit scheme 1991 3

4. Types of Capital Assets Short Term Capital Asset- 36 months or less Long Term Capital Asset- 36 months or more 4

5. Transfer Transfer in relation to capital asset includes: Sale Exchange Relinquishment of asset Extinguishment if any right in the asset Compulsory acquisition of any asset under law 5

6. Clubbing of Income Provisions of Section 60 to 64 of Income Tax Act 1961 may make you liable to pay tax on income which is not earned by you. Inclusion of others income in the income of assessee is called “Clubbing of income” and such clubbed income is termed as “Deemed Income ” 6

7. Following acts will lead to Provisions of Section 60 You own an asset. Asset is not transferred by you . You transfer the income earned from such assets to any person. 7