Capital gain on industrial gala

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This query is : Resolved

ADS ASSOCIATES (Querist)

13 April 2012 My client(proprietor) had purchased a Industrial Gala during 2005-2006 for around
Rs 10 lacs.
Since he is running a proprietary business, depreciation have been claimed from date of purchase till date.
NOW WDV of assets is around 5.75 Lacs

He is planning to sell the same during FY 2012-2013 and consideration is been fixed as per Market Value/Stamp Authority Value i.e 25.75 Lacs

I have a query if he sells this asset, then there would be a SHORT TERM Capital Gain of Rs 20 Lacs.

I believe that there arent any exemptions to short term capital gains

Are there are any exemptions under Income Tax Act OR
Is there is any alternative to SAVE Tax of my clients

Any and many suggestions are Welcomed

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

15 April 2012 Block of Asset concept is followed in IT and if you acquire any asset in the same block , you can save the block from becoming it an empty one. The cost of new asset will manage the STCG.
.
You may invest U/s 54EC in Bonds. The Factory Shade is an LTCA. The fiction of STCG/STCL is limited to Section 50 only.
.

Prakash Kochar

Prakash Kochar (Expert)

16 April 2012 Mr. Bafna is correct.
For calculating tax it will be treated as STCG u/s. 50 as the depreciation is claimed, as the asset was held for more than 36 months it is LTCA, exemptions allowable for LTCG can be availed.

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