Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

capital gains tax

ca cs akansha juneja (Practising Chrartered Accountant) (66 Points)

11 January 2019

Firm had a leased hold land for 99 years on which it constructed a shed in year 2003 amounting Rs 120000/- ..in year 2018 the shed was sold for 1200000/- when it's depreciated value was Nil in books of account .. how much capital gain tax would be attracted??

Reply
Follow
Share

5 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 11 January 2019

while selling depreciable asset like building, capital gains shall be long term capital gains as the provisios of section 50b and section 45 are distinct and do not have any bearing on each other
so cg tax will be calculated in normal by indexing the cost of 120000 with 2018 index against 2003 index and same to be deducted from sale consideration of 1200000. balance will be LTCG.

MOHAMMED IMRAN (1020 Points)
Replied 11 January 2019

as per the above question - the asset is a DEPRECIABLE CAPITAL ASSET SO, IT IS ALWAYS TAXABLE AS - DEEMED TO BE THE CAPITAL GAINS ARISING FROM THE TRANSFER OF SHORT -TERM CAPITAL ASSET (section 50/section50A)
so, there is no Indexsation benefit is available

capital gains =
full value consideration. less
( expenditure incurred wholly & exclusively in connection with such transfer + WDV of the block of assets at the BEGINNING OF THE PREVIOUS YEAR + the actual cost of any asset falling within the block of assets acquired during the previous year)

# for further information please reply

2 Like

ca cs akansha juneja (Practising Chrartered Accountant) (66 Points)
Replied 11 January 2019

Thanks for th information .. any tax planning can be done for the same

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 11 January 2019

since it's a long term capital asset you can claim exemption under section 54E

rama krishnan (12234 Points)
Replied 12 January 2019

short term capital gains tax will arise when the block of assets from which one of the asset has been sold, ceases to exist. even when the block of assets exists, if the sale consideration received is more than the aggregate of wdv plus cost of any property purchased

1 Like