Capital gain on depreciable asset

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shubhangi mahajan (Querist)
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14 December 2011 when total sale consideration exceeds the opening wdv and actul cost but the remaining balance after deducting the above mentioned deductions what would be the treatment, in case expenditure on transfer is more??

Darshit Joshi

Darshit Joshi (Expert)
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14 December 2011 the section read as follows:
(1) where the full value of the consideration received or accruing as a result of the transfer of the asset together with the full value of such consideration received or accruing as a result of the transfer of any other capital asset falling within the block of the assets during the previous year, exceeds the aggregate of the following amounts, namely:-

(i) expenditure incurred wholly and exclusively in connection with such transfer or transfers;

(ii) the written down value of the block of assets at the beginning of the previous year; and

(iii) the actual cost of any asset falling within the block of assets acquired during the previous year, such excess shall be deemed to be the capital gains arising from the transfer of short-term capital assets;

It means that gain or loss has to be computed after deducting cost of the transfer also. If after deducting cost of transfer there is surplus it will be STCG if it is a loss it will be STCL.

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