C H AP T E R 1 1 : C A P I T AL G A I N S

Section 2(14): Capital Asset - Capital asset means property of any kind held by an assessee, whether or not connected with his business or profession, but :aes not include a) Any stock-in-trade, consumable stores or raw materials held for the purposes of his business of profession b) Personal movable property held for personal use by the assessee or any dependent member of his family c) Agricultural land in India which is not situated in any specified area d) Gold Bonds issued by Government of India e) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 Note 1: Personal movable property does not include jewellery, archaeological collections, drawings, paintings, sculptures or any work of art. Note 2: Jewellery includes Ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not sewn into any wearing apparel 2. Precious or semi-precious stones, whether or not set in any furniture, utensil or any other article or sewn into any wearing apparel. Section 2(22B): Fair Market Value in relation to a capital asset means the price that the capital asset would ordinarily fetch on sale in the open market on the relevant date. Where the price is not ascertainable, such price may be determined in accordance with the rules made under this Act. Section 2(29A): Long Term Capital Asset and Section 2(42A): Short Term Capital Asset- A capital asset held by an assessee for not more than 36 months (before the date of transfer) is a short term capital asset. However, the following will be treated as a short term capital asset if it is held

for not more than 12 months:

a) Shares held in a company b) c) d) e) Securities listed at a recognized stock exchange in India Units of UTI Units of a mutual fund Zero Coupon Bonds

Note: 1. In case of a share or any other security subscribed by the assessee, the period shall be reckoned from the date of allotment of such financial asset. 2. In case of sweat equity shares, the period of holding shall be reckoned from the date of allotment such equity shares.

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