it will help you to understand this concept very easily. It contains definition of capital account transaction,explanation of definition, classification of capital account transaction (FDI, Portfolio investment, other investment & reserve account)

1. CAPITAL ACCOUNT
TRANSACTIONS

2. Definition - Capital Account Transaction
A transaction which alters :-
 The assets or liabilities, including contingent liabilities,
outside India of persons resident in India or,
 Assets or liabilities in India of persons resident outside
India, and
 Transactions referred to in section 6(3).
• In other words , capital account is reflects net change in
ownership of national assets.

3. Section 6(3)
• “Without prejudice to the generality of the provisions of
sub-section (2), the Reserve Bank may, by regulations
prohibit, restrict or regulate the following,—
 transfer or issue of any foreign security by a person
resident in India;
 transfer or issue of any security by a person resident
outside India;
 transfer or issue of any security or foreign security by any
branch, office or agency in India of a person resident
outside India;
 any borrowing or lending in foreign exchange in whatever
form or by whatever name called;

4.  any borrowing or lending in rupees in whatever form or
by whatever name called between a person resident in
India and a person resident outside India;
 deposits between persons resident in India and persons
resident outside India;
 export, import or holding of currency or currency notes;
 transfer of immovable property outside India, other
than a lease not exceeding five years, by a person
resident in India;
 acquisition or transfer of immovable property in India,
other than a lease not exceeding five years, by a person
resident outside India;

5. capital account in macroeconomics
At high level :-
capital account =
Change in foreign ownership of
domestic assets
- Change in domestic ownership
of foreign assets

6. Foreign
direct
investment
Portfolio
investment
Other
investment
Reserve
account
Capital
account
Breaking this down :-

7. explanation
Foreign direct investment (FDI)
• Refers to long-term capital investment, such as the purchase or
construction of machinery, buildings, or whole manufacturing plants.
• If foreigners are investing in a country, that represents an inbound flow
and counts as a surplus item on the capital account.
• If a nation's citizens are investing in foreign countries, that represents an
outbound flow and counts as a deficit.
Portfolio investment
• Refers to the purchase of shares and bonds.
• The income derived from these assets is recorded in the current account
• The capital account transaction arise when any buying or selling of the
portfolio assets done in the international capital markets.

8. Other investment
• Its includes capital flows into bank accounts or provided as loans.
• Short-term investments in fluctuations in interest rates or/and exchange
rate of currencies .
Reserve account
• The reserve account is operated by a nation's central bank to buy and sell
foreign currencies.
• Inbound capital flows from sales of the nation's foreign currency or can
cause a rise in value (appreciation) of a nation's currency,
• while outbound flows can cause a fall in value (depreciation).