Related provision sec 50

It you read section 50 you will find that section 50 is a special provision and overrides section 2 (42A), section 48 and section 49. So whatever is the period of holding you have to ignore it. Compute the gain as per section 50 and not as per section 48 and also the determine the cost of acquisition as per sec 50 and not as per sec 49. Thereafter whatever gain will come will always be deemed to be short term capital gain as envisaged in sec 50. So period of holding, indexed or otherwise cost of acquisition and the resultant capital gain is superseded by sec 50.

Since section 50 expressly and specifically provides for considering the gain from depreciable assets as STCG there is no other choice but take the gain as STCG irrespective of its period of holding.

But remember only the gain is considered as STCG I.e section 50 changes the nature of gain only and not the nature of asset. Suppose in a block there exist a building in which depreciation was claimed at 10% say for last 5 years. So by definition its a long term capital asset. Let us assume its WDV is Rs 100000 and sold for Rs 300000. Undoubtedly the capital gain of Rs 200000 will be deemed to be STCG due to applicability of sec 50. But remember sec 50 does not change the nature of the asset. It is still long term capital asset. So tax there on will be payable as per section 112 @ 20% and not tax applicable to STCG. This is grand mistake many do which I have noticed.