Capital gain & depriciation point

1) Total Short Term Capital Gain(being depreciable asset), if both blocks ceases to exist will be

Sale consideration                                                    80

less : TOtal WDV of furniture & building sold ---- XX

STCG                                                                           

2) If Blocks are still existing, then while deducting the amount of sale consideration, the sale consideration(i.e. Rs. 80) should be bifurcated in ratio of cost of asset sold(i.e. in ratio of 50:5)

and the capital gain(for each block) will be calculated as follows:

Opening WDV                                               XX

Add: additions                                              XX

less: deletion(i.e. sale consideration)     XX

 Closing WDV                                               XX

If the resulting WDV is positive, then no capital gain arises, infact the resulting WDV will be eligible for the depriciation

If the resulting WDV is negative, then the same shall be taxable as Short Term Capital Gain

It is not calrified the use of building and furniture. If it was for business purpose and  had been  grouped as depreciable assets then the treatment suggested by CA Sumit Gover is ok. But if it was personal use Assets then the entire gain would be considred as STCG. The salses consideration entire furnished flates has to be taken and cost of acquisition of both building and furniture has to be taken in to account. Alternatively the estimated furniture value may be reduced from the total consideration to save the stamp duty to that extent. But in both  the cases STCG will remain same.

Dear Saiyum Khan,

In case furniture is used for personal use, then the same doesn't fall in the definition of capital asset(refer Section 2(14)(ii) for the same). in that case, no capital gain will airse on furniture.

Thanks to you both.