Short/long term capital loss

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Guest (Querist)

01 April 2012 When asset on which depreciation is allowed u/s 32(1)(i) is sold discarded or demolished in a previous year, and if the insurance, salvage, compensation or sale value, as the case may be, receivable in respect of such asset falls short of the written down value, such difference would be allowed as deduction [Terminal Depreciation] u/s. 32(1)(iii). The condition for allowing such deduction is that such deficiency is actually written off in the books of account.

My Query is that what would be the treatment of Short/Long Term Capital Loss in case we are claiming Terminal Depreciation in our books?

CA Chandra Kishore Bajpai

CA Chandra Kishore Bajpai (Expert)
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02 April 2012 In case of depreciable Asset, there would arise short term capital loss or short term capital gain provided there is no asset in the respective block of assets.