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Capital gain

09 June 2016

I have some block of depreciable assets out of which One assets sold during the previous year. Please tell me capital gain arise or not for such transfer

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10 Replies

vasanth (Student CA IPC / IPCC) (41 Points)
Replied 09 June 2016

Yes..Capital gain attracts..Either long term or short term capital gains tax depends upon period of holding.

NV KIRANKUMAR REDDY (student) (123 Points)
Replied 10 June 2016

as the asset sold is a single asset. We have to reduce wdv of the block + additions made during the year. After reducing the amount even if there is a value then only capital gains arises. Capital gains on depreciable assets will always be short term capital gains only irrespective of period of holding. The important thing is the block should continue after the sale of some assets.i f the sale value us lower than wdv+additions then the balance amount will be depreciated over the remaining life. if there is loss and no assets are in the block

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NV KIRANKUMAR REDDY (student) (123 Points)
Replied 10 June 2016

then the loss arisen will be short term capital loss

CA Neel Sarswati (Chartered Accountant) (21 Points)
Replied 10 June 2016

if asset held for long term assessee can claim benefit u/s 54,54EC etc..

NV KIRANKUMAR REDDY (student) (123 Points)
Replied 10 June 2016

yeah..will u please tell me what is nature of asset

Kowsthubha (Article Assistant) (49 Points)
Replied 10 June 2016

If the block exists after asset being sold then we have to reduce the amount from Block and not capital gain arises if block is sold then STCG and computation og G under section 50 is done

Vinay somani (CA, CS) (Assistant Manager-Accounts) (549 Points)
Replied 10 June 2016

According to section 50 of Income tax act if an assessee has sold a capital asset forming part of block of assets on which the depreciation has been allowed under Income Tax Act, the income arising from such capital asset is treated as short term capital gain.

If a part of such capital asset forming part of a block of asset has been sold and after deducting the net consideration received from sale of such asset from the written down value of the block of such asset the written down value comes to NIL then the gain arising shall be treated as short term capital gain and in such case where written down value has become NIL no depreciation shall be available on such block of asset even if some assets are physically left in the block of assets.

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CA shanky pahoja (accountant) (615 Points)
Replied 10 June 2016

if sale consideration of asst is more than block value capital gain will arise, otherwise only block value will be reduced by sale consideration of asset

CA shanky pahoja (accountant) (615 Points)
Replied 10 June 2016

no it does not depend on period of holding as in case of depreciable asset there is always short term capital gain

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kaushal kumar jaishwal (CA) (34 Points)
Replied 11 June 2016

in accounting you have to book the profit or loss on sale of assets, but when we are talking about tax on sale of assests then tax on sale of asset arise only when the block of assets will not be continued in comming years and if block of assets exist then capital gain arises so just reduce the sale amount from the wdv amount.