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