Capital Gain Tax
This query is : Resolved
28 February 2020
I have a shop and to the left right of it are shops which are qwned by a single owner.
I entered into a deal with that owner to exchange the shops with him and i agreed to exchange mine with that falling left to my shop.
Now I file return under section 44AD presumptive scheme, so just want to know that can apply Section 50 of Income Tax Act to save capital gain on depreciable assets.
Kindly advise.
Thanks
Chirag Dayani.
I entered into a deal with that owner to exchange the shops with him and i agreed to exchange mine with that falling left to my shop.
Now I file return under section 44AD presumptive scheme, so just want to know that can apply Section 50 of Income Tax Act to save capital gain on depreciable assets.
Kindly advise.
Thanks
Chirag Dayani.
02 March 2020
1. It is clear that exchange of a capital asset is a transfer and as such liable to capital gains.
2. In case you have shown earlier your shop as an depreciable asset and in the same block ( i.e. of Land & Building @ 10%) you can reduce the block value by the amount of sales consideration (Stamp Duty Valuation, if no other benefits received).
3. If , no such avenue is available , offer the capital gains for taxation.
2. In case you have shown earlier your shop as an depreciable asset and in the same block ( i.e. of Land & Building @ 10%) you can reduce the block value by the amount of sales consideration (Stamp Duty Valuation, if no other benefits received).
3. If , no such avenue is available , offer the capital gains for taxation.
02 March 2020
Though your new shop is also come in the similar block but the fact must be kept in mind that you have claimed depreciation on the older shop in the preceding previous years.
02 March 2020
In S. 44AD it is deemed that depreciation is allowed on all the depreciable assets. So if you dare to take this calculated risk then you may follow the same of claiming depreciation in the forthcoming years.
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