A capital asset is defined as property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible or intangible, fixed or circulating. Thus, land and building, plant and machinery, motorcar, furniture, jewellery, route permits, goodwill, tenancy rights, patents, trademarks, shares, debentures, securities, units, mutual funds, zero-coupon bonds etc. are capital assets.
Excluded from the definition
Any stocks in trade, consumable stores, or raw materials held for the purpose of business or profession have been excluded from the definition of capital assets. Any movable property (excluding jewellery made out of gold, silver, precious stones, and drawing, paintings, sculptures, archeological collections, etc.) used for personal use by the assessee or any member (dependent) of assessee’s family is not treated as capital assets. For example, wearing apparel, furniture, car or scooter, TV, refrigerator, musical instruments, gun, revolver, generator, etc. is the examples of personal effects. (But see IRS publication 544 chapter 2.) Agricultural land situated in rural area. 6.5% gold bonds or 7% gold bonds 1980, national defense gold bond 1980, issued by the central government. Special bearer bonds, 1991 Gold deposit bonds issued under gold deposit scheme, 1999. Security deposits issued under gold monetisation scheme 2015