Capital Account

Tax Glossary Definition

Capital Account

Capital Account – The capital account is a component of a country’s balance of payments that tracks cross-border transactions involving capital assets such as investments, property, and financial instruments. It shows changes in ownership of assets and liabilities between residents and non-residents, influencing the nation’s overall financial position.

Example: If an Indian company purchases shares in a U.K.-based enterprise, the investment is recorded as a capital account transaction in India’s balance of payments.

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