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Querist : Anonymous

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Querist : Anonymous (Querist)
11 May 2013 can anybody explain the clear relation ship between terminal depreciation , balancing charge & capital gains
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CA Sourabh Agarwal

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CA Sourabh Agarwal (Expert)
11 May 2013 These terms are used only in case of undertaking engaged in generation or generation and distribution of power. They use SLM basis of depreciation.
Suppose I have a machine having Original Cost as Rs. 100. Current WDV Rs. 75.

Now If asset is Sold for ---

1) Rs. 60, difference (i.e. Rs. 15) is terminal depreciation. [Sec. 32(1)(iii)]

2) Rs. 95, difference (i.e. Rs. 20) is Balancing Charge. [Sec. 41(2)]

3) Any amount over Rs. 100 will be taxable as either LTCG or STCG. [Here Cost of Acquisition would be 100]
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C A S.S.Agarwal, M.Com.,LL.B,

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C A S.S.Agarwal, M.Com.,LL.B, (Expert)
26 June 2013 I agree with the expert
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