Transfer of items excluded from Capital Asset us 2(14) - Tax

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CA Sanjay Baheti (Querist)
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11 February 2011 Items of Personal Effects, Agricultural Land Beyond specified area are not Cap assets and hence not taxable under Cap gains.If these items are not capital assets, what are their status and is the receipts taxable under Income from other sources? Assume that its only a one time transaction.

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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11 February 2011 Agricultural Land which is not a Capital Assests as per section 2(14) of the Income Tax is not taxable under any head. Any profit on sale of such Agricultural Land is exepted under Income Tax

CA SIDDHARTH MEHRA

CA SIDDHARTH MEHRA (Expert)
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11 February 2011 Dear Sanjay, in a plethora of judicial precedents, capital gains have been held to be 'deemed income' and therfore, unless specifically taxable, a capital gain a capital receipt not chargeable to tax. As you have quite aptly mentioned, in accordance with the provisions of section 2 (14), the items mentioned above are excluded from the definition of the term 'capital asset'. Therefore, any gain arising from the transfer of such assets is a capital receipt not chargeable to tax.

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