on 1st april i have the block of plant n machinery worth Rs. 4 lacs. In october i sold the entire plant n machinery for Rs. 8 lacs and purchased some machines worth Rs. 10 lacs in January.
my question is whether Section 50 is attracted for deemed capital gains on this transaction and i have to pay short term capital gain or not.
Yes, u can tax it under sec.50, provided the asset which u purchased is of the same block as that of the asset which u sold
I m sorry for my wordings above. I have missed NOT in the statement there. ie) THE ASSET PURCHASED SHOULD NOT BE OF THE SAME BLOCK AS THAT OF THE ASSET SOLD, ie, there should not be any asset available in the block of assets which have been sold
on sale of any assets section 50 shall be attracted only
if due to such sale (i.e. on reducing sale amount from block ) as on 31st march of that year (not on date of sale )
|
Particulars |
Note |
Details |
|
Block |
|
Machinery |
|
Depreciation rate |
|
15%* |
|
Opening WDV as on 1.04.20XX |
|
Rs. 4,00,000 |
|
Add: addition during the yr |
|
10,00,000 |
|
Less: ‘Money payable’ for assets sold during the year |
|
8,00,000 |
|
Closing WDV (before depreciation ) |
[Note 1 ] |
6,00,000 |
|
Less: depreciation [6,00,000 x 15% x 50%] |
Note 2 |
45000 |
|
Closing WDV as on 31.3.20X1 |
|
5,55,000 |
Note 1 Since this amount is not negative and assets exist in block, sec 50 not attracted
Note 2 Since assets used for less then 180 days during the PY and purchase during the same year , only 50% of depreciation is allowable .
ASSUMPTION NOTE : It has been assumed that the assets is not eligible for addition al depreciation so it is not provided for.
* Assumed rate of depreciation on the machinery is 15% .
i agree with manmohan
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