If an asset on which deduction under sec 35AD is sold under circumstances specified in sec 47, will there be PGBP gain on sale price under sec 28?
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Sec 35ad of income tax act
Replies (2)
Yes, But after considering depreciation as per section 32 of income tax act 1961
Dear Rashmi,
Section 35AD assets is sold in manner given in Section 47 then as per there is two aspects which needs to be considered:
1. For Transferor: The Deduction has already been taken and therefore as per Explanation 13 to sec 43(1) the actual cost of 35AD assets shall be nil and any amount received against that shall be treated as the income of Transferor UNDER THE HEAD PGBP.
2. For Transferee: ( If Asset is received as Capital Assets) The Cost of acquisition of such assets in hand of Transferee shall taken to be NIL.
(If the assets is received as Business assets) It's actual cost will be nil under main section 43(1).
Section 35AD assets is sold in manner given in Section 47 then as per there is two aspects which needs to be considered:
1. For Transferor: The Deduction has already been taken and therefore as per Explanation 13 to sec 43(1) the actual cost of 35AD assets shall be nil and any amount received against that shall be treated as the income of Transferor UNDER THE HEAD PGBP.
2. For Transferee: ( If Asset is received as Capital Assets) The Cost of acquisition of such assets in hand of Transferee shall taken to be NIL.
(If the assets is received as Business assets) It's actual cost will be nil under main section 43(1).
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