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Capital Gains

Prabeer (B. COM (H) CA & CS Final) (5484 Points)

27 November 2008

Is transfer of a personal movable asset assessed under Capital Gains?

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CA. Rajeev Aggarwal (Chartered Accountant) (3424 Points)
Replied 27 November 2008

Section 2(14) – Definition of Capital Asset

Property of any kind (whether tangible or not)

held by an assessee

whether or not

connected with his business or profession

but does not include

(i) any stock-in-trade, consumables or raw materials

(ii) personal effects held for personal use

by the assessee or any member of his family dependent on him(iii) Agriculture land situated in RURAL AREA

(iv) Gold Deposit Bonds issued under Gold Deposit Scheme, 1999

Personal effects means Moveable Property Including wearing apparel and furniture Excluding jewellery

The Guiding factor whether an article constitute personal effect is in the nature of the article

Asset Personal Effect Chargeable to Tax

Car Yes No

House property No Yes

Silver utensils Yes No

Gold utensils No Yes

H.H. MAHARAJA RANA HEMANT SINGH JI (SC)

Silver Coins used in puja are chargeable to capital gains as only those effects can be legitimately be said to be personal which pertains to the assessee’s person.

Hope u satisfy with the answer

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Jeet Biswas (ACMA (in Service)) (5073 Points)
Replied 27 November 2008

Personal Movable assets(such as furniture, utinsils, vehicles etc) are expressly excluded from the definition of Capital Assets u/s 2(14). So they cant be taxed under the head of income frm C.G.

the Exceptions to the above are, jewellery, archeological collections, drawings & paintings, sculptures, any work of art. SO, these assets, although personal in nature come under the definition of Capital Assets & their transfer will attract capital gains tax...