Taxability of income from sale of depreciable asset
This query is : Resolved
CA ROSHAN TIWARI
(Querist)
30 September 2011
Dear Sir,
i have query on the above subject and i seek your help.
when depreciation is allowed as deduction from income from business , why income from sale of same depreciable asset is charged or covered by section 50 as STCG under capital gain and not as an income from business?
where as when a telecom licence fee is amortised and sold subsequently . the difference from cost on date of sale and sale proceed to the extent taken deduction from business income is taxed as business income and balance is taxed as capital gain?
i hope the query is clear.. waiting for your reply
thanks.
i have query on the above subject and i seek your help.
when depreciation is allowed as deduction from income from business , why income from sale of same depreciable asset is charged or covered by section 50 as STCG under capital gain and not as an income from business?
where as when a telecom licence fee is amortised and sold subsequently . the difference from cost on date of sale and sale proceed to the extent taken deduction from business income is taxed as business income and balance is taxed as capital gain?
i hope the query is clear.. waiting for your reply
thanks.
30 September 2011
A business asset is a capital asset and sale of capital asset attracts capital gain.
Therefore, sale of business asset attracts capital gain under Section 50B.
Licence fees is not a capital asset. It is an expenditure which is allowed to be ammortised over the period of the licence.
Further, the chapter of profits and gains of business or profession provides specifically the treatment of claiming deduction & taxability of licence fees.
Therefore, sale of business asset attracts capital gain under Section 50B.
Licence fees is not a capital asset. It is an expenditure which is allowed to be ammortised over the period of the licence.
Further, the chapter of profits and gains of business or profession provides specifically the treatment of claiming deduction & taxability of licence fees.
CA ROSHAN TIWARI
(Querist)
30 September 2011
if license fee is not a capital asset no capital gain can arise.
unless there is any transfer of capital asset provisions of capital gain do not apply or capital gain or loss cannot arise.
a capital asset is a property of any kind with certain exceptions ..
therefore telecom license fee is a capital asset.
unless there is any transfer of capital asset provisions of capital gain do not apply or capital gain or loss cannot arise.
a capital asset is a property of any kind with certain exceptions ..
therefore telecom license fee is a capital asset.
CA ROSHAN TIWARI
(Querist)
21 November 2012
if license fee is not a capital asset no capital gain can arise.
unless there is any transfer of capital asset provisions of capital gain do not apply or capital gain or loss cannot arise.
a capital asset is a property of any kind with certain exceptions ..
therefore telecom license fee is a capital asset.
unless there is any transfer of capital asset provisions of capital gain do not apply or capital gain or loss cannot arise.
a capital asset is a property of any kind with certain exceptions ..
therefore telecom license fee is a capital asset.
21 November 2012
Please understand that the licence FEES is NOT capital asset.
The LICENCE is the capital asset. You acquire and sell a LICENCE (not the fees).
Please understand the difference between LICENCE and LICENCE FEES.
The LICENCE is the capital asset. You acquire and sell a LICENCE (not the fees).
Please understand the difference between LICENCE and LICENCE FEES.
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