Under section 2(e) of FEMA, a 'capital account transaction' means a transaction which alters:

Correct answer: C) The assets or liabilities, including contingent liabilities, outside India of persons resident in India, or the assets or liabilities in India of persons resident outside India

Explanation

Section 2(e) defines a capital account transaction as one that alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India, or in India of persons resident outside India. It includes the transactions referred to in section 6(3). Payments for trade, services and income are current account transactions.