Question

Under IT Act, 1961 which of the following is not a capital asset? (a) Jewellery (b) Self occupied house (c) Stock in trade of a business (d) Share in a company​

Answer 1

Under the IT Act, 1961 which of the following is not a capital asset (c) Stock in trade of a business.

Explanation for the answer:

• Under the IT Act 1961,
• Capital Asset is defined to include:
• a) Any kind of property which is held by an assessee, whether or not connected with the business or profession of the assessee.
• b) Any security which is held by a FII which has invested in such securities in accordance with the regulations made under the SEBI Act, 1992.
• Here, Under the IT Act, 1961 (c) Stock in trade of a business is not a capital asset.
• Hence, the correct answer among all the options is option (c) Stock in trade of a business.

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Answer 2

Answer:

The correct option is c)Stock in the trade of a business.

Explanation:

By definition, a capital asset includes:

a) Any type of property that an assessee owns, whether or not it is related to their place of employment or place of business.

b) Any securities held by an FII that has purchased them in line with the SEBI Act of 1992's requirements.

However, the following are not considered capital assets:

a)  Stock in trade of a business, consumable stores, and raw materials held for business or profession;

b) Movable property owned by the taxpayer for his personal use or the use of any family members who are dependent on him. However, even if utilized for personal reasons, jewelry, expensive stones, and decorations made of silver, gold, platinum, or any other precious metal, archaeological collections, drawings, paintings, sculptures, or any other work of art will be regarded as capital assets;

c) Special Bearer Bonds and Specified Gold Bonds;

d) Indian agricultural land that is not located:

1. Under the authority of a municipality, notified area committee, town area committee, or cantonment board, and with at least 10,000 inhabitants;

2. Within the following range of aerial distance from any municipality's or cantonment board's local limits:

i. not exceeding 2 kilometers, if the population of the region is greater than 10,000 but not greater than 1 lakh;

ii. not exceeding 6 KM if the population of the region is greater than 1 lakh but not greater than 10 lakhs; or 

iii. If there are more than 10 lakh people living in the region, the distance must not exceed 8 kilometers.

e) Certificates of Deposit issued under the 2015 Gold Monetization Scheme.

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