capital gain tax on disposal of depriciable building

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shaffy (Querist)
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03 August 2016 suppose we owned a land and building on which depriciation is claimed till 05-06 nd nw we want to destroy or dispose of the building..aftr diposal sold the plot..how do we calculate capital gain tax on both if depriciation is claimed on building only or if dep is claimed on land nd building both treating it as commercial property?

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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04 August 2016 Depreciation is allowable on building and not on the land. If any depreciable asset is sold and its entire block is exhausted, capital gains under special provision of section 50 is applicable. Such gain is always 'short term capital gain'. In case of transfer of land it may be a short term or long term capital gain. It shall be calculated separately.

shaffy

shaffy (Querist)
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04 August 2016 what if depriciation is claimed till 2005-2006 nd nw in the year 2016-2017 we want to exhaust the building then also will it be short term

shaffy

shaffy (Querist)
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04 August 2016 what if depriciation is claimed till 2005-2006 nd nw in the year 2016-2017 we want to exhaust the building then also will it be short term capital gain or long term capital gain?? nd is it capable of calculating

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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04 August 2016 In case of depreciable asset (building here), it is short term capital gain, if all the assets in the block exhausts. In case of land it may short term or long term.

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shaffy

shaffy (Querist)
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04 August 2016 u r ot getting my point...nt satisfied

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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04 August 2016 Once you used in business and claimed depreciation on building it is a short term capital asset. On its sale, it is liable for short term capital gains tax. The land on which the building constructed is taxable either long term or short term capital gains. This is the law as per IT Act. Hope you go it now.

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