Whether indexation allowed on sale of commercial bldg

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Querist : Anonymous

Querist : Anonymous (Querist)

01 October 2014 sale of commercial building costing Rs. 2 crores and depreciation claimed WDV Rs. 0.80lacs. sales Rs. 5 crores. Building acquired in 2003. How profit will be charged to tax ? whehter indexation allowed ? how to worked out indexation considering depreciation provided .

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

01 October 2014 it will be long term capital gain and cost of inflation index is allowed.

Querist : Anonymous

Querist : Anonymous (Querist)

01 October 2014 Thanks for your prompt reply.
This property was rented out, income from the same is treated as income from property and 30 % was claimed as expenditure. Depreciation on the same is disallowed in IT Computation . How to work out the capital gain? we have provided depreciation on the same in books.

Nikhil Kaushik

Nikhil Kaushik (Expert)

01 October 2014 kindly note that indexation is not available for depreciated assets.

you may refer to case such as M. Raghavan v. Assistant Commissioner of Income-tax
TAX CASE NO. 350 OF 2001 (Madras High Court)

Further, where depreciation is claimed, the capital gains are always considered as short term capital gains (refer section an asset (refer section 50 of the Income-tax Act)