Sec 50 of income tax act

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Niranjan Chaitanya (Querist)
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01 July 2012 4 partners purchased industrial plot and constructed building for their business. Now after 4 years they are selling the same to 3rd party. After selling they earned say 5 lakh( sale value - Book Value).
Will this 5 lakhs be included in Business income or need to calculate indexing and pay long term capital gain on it.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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02 July 2012 The gain arising on sale of building shall be short term capital gain.

Niranjan Chaitanya

Niranjan Chaitanya (Querist)
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02 July 2012 In case of lang term capital gain, if partnership firm invest proceedings in purchasing any property in that will be they able to claim exemption.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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02 July 2012 1. Firstly, gain arising on transfer of a depreciable asset is ALWAYS short term capital gain.

2. In case of other assets (only land), if the gain is long term, the partnership firm CANNOT avail exemption u/s 54F by investing in a residential house property as the exemption is available only to an individual or HUF.

However, the firm can avail exemption u/s 54EC by investing in specified bonds.

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