An office premises owned by Private Limited Company, is depreciated every year.
After 10 years Company sells the office premises and buys a new one from sale proceeds plus loan.
1. How the capital Gain is calculated ? cost of aquisition X cost inflation index of the year of sale
cost inflation index of the year of purchase
or depreciated cost of aquisition X cost inflation index of the year of sale
cost inflation index of the year of purchase
2. How the entries to be passed in books ?
3. Whether re-investment benefit will be available to company ?
Kindly advice, thank you very much
Valerian D'souza
Accounts manager.
CAclubindia
