Capital Assets are significant pieces of property such as homes, cars, investment properties, stocks, bonds, and even collectibles or art. For businesses, a capital asset is a Tangible Asset with a useful life longer than a year that is not intended for sale in the regular course of the business’s operation.
Example of a Capital Asset?
A capital asset is property that is expected to generate value over a long period of time. Capital assets form the productive base of an organization. Examples of Capital Assets are buildings, computer equipment, machinery, and vehicles.
Types of Capital Assets?
Examples of assets are a flat or apartments, land, shares, mutual funds, gold among many others. There are two types of capital gains: Short-term capital gain: capital gain arising on transfer of short term capital asset.
Transfer of Capital Assets?
Transfer of a capital asset includes: 1.Sale, exchange, relinquishment (Surrender) of the asset; 2. Extinguishment of any rights in the asset (reducing any right on asset);
What are Not Capital Assets?
Some other examples of Capital assets include Land and Building, Plant and Machinery, Furniture etc. Anything which is not of a capital nature is termed as a Non- Capital asset. Any stock, inventory or property that you hold for selling purposes are Non- Capital assets.
Long Term Capital Assets?
Long term capital asset means a capital asset held by an assessee for more than 36 months immediately preceding the date of its transfer.