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which is a capital asset?

which is a capital asset?

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Answer #1

Capital Asset:

A capital asset is fixed, movable or immovable, tangible or intangible properties such as homes, cars, building, stocks, bonds etc.

For business point of view, a capital asset is a type of asset which is having a useful life of more than a year, that is not intended for sale in the regular course of business.

It is a fixed asset which is employed as a way of generating income. Depreciation is also claimed on it. It is useful in improvement of our business.

For example, if someone buys a building for its office purpose, then the building is considered as a capital asset, but if someone buys a building for selling purpose or for rental purpose, then it is not considered as capital asset.

For any query feel free to ask in comments.

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