30 October 2009
My one of the clients is member in Karnavati Club which is non profit organisation. He has paid Rs.50000 in year 2002 towards membership fees and in year 2009 he has transfereed his membership to another person and received Rs.500000/- for waiving membership.
30 October 2009
Capital asset means "Property of any kind held by the assessee ....."
Property of any kind is of widest amplitude and it includes not only tangible asset but also intangible assets.
Intangible assets are like route permits for bus, tenancy rights etc.
Membership in a club is a exclusive right, which can be enjoyed by those who are member of the club. It is a intangible asset and hence it is a capital asset. Any transfer of capital asset would attract capital gain tax. In this case transfet of membership in a club is taxable to capital gain. Relinquishment of a right is transfer as per the definition given in the act.
CAclubindia
