Depreciation

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mavi (Querist)

26 June 2015 Say we had purchased a Birla Yard in past years for say Rs3000000 and we have shown it as an asset and charged a depreciation on it in past years,suppose we have sold it in PY for say Rs 4000000. After charging a depreciation in past years Knw the WDV of yard is 400000,so the capital gain comes to 3600000 .Plz help me in showing wheather i was correct in showing birla yard as Asset in my books of account,and and if so what will be a capital gain Know ,and suppose if i had shown it under as investment what wount have been capital gain and at what percentage

Soumitra Basu

Soumitra Basu (Expert)

30 June 2015 IF YOU HAVE BUSINESS AND THIS YARD HAD BEEN USED FOR THE PURPOSE OF BUSINESS THEN YOU WERE CORRECT IN SHOWING THE SAME AS ASSET IN THE BOOKS OF ACCOUNT. YOU HAVE ENJOYED DEPRECIATION TO THE TUNE OF 36 LACS AND PULLED DOWN YOUR PROFIT TO THAT EXTENT. NOW THIS WILL BE TREATED AS CAPITAL GAIN UNLESS YOU PURCHASE SIMILAR NATURE OF ASSET DURING THE YEAR. THIS WILL BE TREATED AS SHORT TERM CAPITAL GAIN. HOWEVER YOU WILL BE ENTITLED TO MAKE INVESTMENT.

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