Capital Gain

There will be no bifurcation in this case....

Building and land will be considered one and the same coz there can be no bldg without a land..

Treatment will be as follows:

Sale consideration                                                    xx

Less: Cost of land and bldg:                                  (xx)

(refer proper indexes)                                                  

LTCG                                                                             xx

Poonam is right

From your question it appears that the building and land was used for business as Depreciation u/s 32 has been claimed.

The value of Land and Building should be accounted seperately as Land is not subject to Depreciation and building is subject to depreciation. 

Treatment at the time of Sale

 Land will be taxable as a long term Capital Gain after applying proper indexation &

Building will be taxable as short term capital gain as per the provisions of section50 and the cost of acqusition will be the WDV as appearing in the Balance Sheet immediately in the previous year of sale

As per my opinion there will be no bifurcation of the sales amount among land and bldg.

But, the calculation for LTCG will be like:

Wrong Answers.

in Case of Depericiable assets there can be STCG only.

now building is depreciable and land  is not. so we must have to bifurcate it.

there will be STCG on building (if any) without any indexation.

and LTCG on Land after indexation.

i have replied you in PM how to allocate cost.

In your question :-

1. Land will be considered as a long term capital asset and

2. Building as Short term capital asset b'coz you are claiming depreciation on it. No indexing will be allowed in case of building.

agree...Building will attract sec 50, since a depreciable asset and land will be taxable u/s 112 as a non-depreciable asset.

Yup treatment specified by shashi is perfectly proper and sunali has appropriately picked the sections in which it vl b taxable...

I AGREE WITH   VARUN SONI

As  you have claimed depreciation it will be charged as STCG. For the reference i am attatching herewith the Section 50 of IT Act, 1961

Dear Mr. Shashi can you please explain your answer.

Claiming Depreciation means it is used for business or profession.

in case of capital gain on depreciable asset used for b & p sale value of asset sold will be deducted from value of block.

and any gain/loss arising will always be short term capital gain wheather asset used for more than 36 months or not.

Land is not depreciable asset so Long term capital gain will arise as period of holding land is more than 36 months.

both of them must be appearing at different different value in Balance Sheet.

so cost of land and WDV of building can be easily known.

and for the value of sale consideration if not seperable Fair market value of Land will be the sale consideration for Land and remaining will be the sale consideration of the building.

if you need further explanation you can tell.

ya.... both sunali and Shashi are right...!!!!

shashi's treatment is rite...