Sale of office Premises by company

Tax queries 1255 views 3 replies

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.

Replies (3)

depreciable assets are chargeble to short term capital gain. benefit of indexation is not available to short term capital asset.short term capital gain on depreciable asset  will be calculated on block of asset basis where if the sale value of asset is more then the wdv of block (at the end of the year) then the difference will be chargeble to short term capital gain.

2. accounting entry - credit the sale amount to the asset and debit the profit to p&l

3- benefit of re investment is not available.

Yes I Totallt agree with Rachit Jain

agree with MR> RACHIT


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