Capital Gains on depreciable assets

This query is : Resolved

Kumar (Querist)
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12 January 2011
Certain assets of Computer category under P&M have been sold. Sale proceeds exceed the WDV.
Is this treated as capital gains or since Computer is not a block in itself and is only a part of P&M block and hence sale proceeds over WDV of computers category needs to be adjusted against the WDV of P&M - General.

Its urgent, please help.

Rajesh

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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12 January 2011 Computer is depreciale @ 60%, you can not mingle the same with plant and machinery general which is depreciable @ 15%, hence computer will form separate block as per definition of block of assets given in section 2(11) of income tax act. So excess of sale proceed over written down value shall be short term capital gain and will be(after set off if any ) chargeable to tax @15%. regards

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