Richa (Internal Auditor) (122 Points)
02 March 2011plz tell me
whether there will be long term capital gain or short term capital gain on sale of a machinery which is given on rent to any other person & depreciation is also claimed u/s 57(income from other sources). is it a depreciable asset & form a part of block?
thanks
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 02 March 2011
It is depreciable asset and claims 15% depreciation under block 'Plant & Machinery'.
EDIT : Regarding, LTCG or STCG, since it is a depreciable asset, it will be STCG only.
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 02 March 2011
And yes dep. is claimed u/s 37 not 57.
Richa
(Internal Auditor)
(122 Points)
Replied 02 March 2011
Thanks for replying Abhishek. that machinery is not used in business but given on rent so rent received is taxed under the head income from other sources & depreciation is an allowable expense.
there is always short term capital gain on depreciable asset. i m confused b/w these two concepts.
whether it form part of block?
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 03 March 2011
Hmmmmmmm........... if, the machinery is just another asset for the business, i.e., business is not to rent the machinery, then, it will form part of block.
CAclubindia
