Tax Liability for A.Y.2008-09

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This query is : Resolved

J R PATEL (Querist)

26 March 2008 1.Company Incurred Loss During the year 0.50 Lac
2. Brought Forward Loss Rs.15.00 Lacs
3. Depreciation Not Charged by the company
4. Company sales its factory premises of Rs.48.00 Lacs there is no assets block after sale proceeds
5. Regular files in time return
6. Cost price of factory premises Rs.25.00 Lacs
7. Book Value of Factory Premises Rs.12.00 lacs

can capital gain set off against B.F Business Loss

and how can be minimize the tax liability?

CA Shailesh +91 9393926464

CA Shailesh +91 9393926464 (Expert)

26 March 2008 In ur case, i clarify as under

Capital Gain:
Excess of Sale Consideration over original cost ------i.e,48-25=23 lacs

Business Income:
On Sale of Depreciable asset - 13 lacs
Less: Current year loss - .50 lacs

Less: b/f loss 12.50 lacs

Hence--------------------No Business Income

U cannot set off Capital Gain with the remaining b/f Business loss of rs 2.50/-lacs

CA. Kirti S. Ganatra

CA. Kirti S. Ganatra (Expert)

27 March 2008 No capital gain can not be set off against business loss

Gayathri Devi

Gayathri Devi (Expert)

27 March 2008 The carital gain is 48-25 is 23 lakhs on sale of factory premises.

During the year the business loss of Rs0.5 lakhs can be set off against the capital gain

The balance taxable capital gain for the year is Rs.22.5 lakhs.

But the carried forward loss of business can be setoff only against the business income so we can carried forward the business loss from the year of loss to 8 A.Y.as per sec 72.

It is a long term capital gain & taxed at 20%

The total tax liability is 4.635 lakhs inclusive of eduction cess.