Plz reply whether CG arises on this or not.
Office Building
Opening Rs 9304925.48
Additions Rs 9347902.66 (a bldg purchased)
Office building added during the year are sold in the same month(in which it is purchased) for Rs 13336875
Plz reply whether CG arises if yes then relevant section under which it arises, and if not then also the relevant sec.
Thanks in Advance.
As the block of building has not ceased even after the sale of the building, so STCG arises on slae. This is because the total of WDV and additions is greater than the sale valaue of the asset sold.
Opening Rs 9304925.48
Additions Rs 9347902.66
Less Sale Value Rs13336875.00
________________
Balance WDV Rs 5315953.14
________________
There won't be any capital gain because neither the WDV is negative nor the block is ceased to exist. The depreciation will be calculated on the balance WDV.
Does it means the building you purchased for Rs 93,47,902.66 sold for Rs1,33,36,875 in the same month? If yes capital gain arises...
NO CAPITAL GAIN.STILL WDV EXISTS.CAPITAL GAIN ARISES IF SUCH INCOME EXCEEDS ORIGINAL COST OF ACQUISITION
Got confused guys: Office buildings are acquired for 93+ Lakh and same has been sold for 1+Cr. Is that means Income exceeds original cost of acquisition. Please clarify.
| Originally posted by : CMA Bhaskar Unnikrishnan MBA | ||
 |
Got confused guys: Office buildings are acquired for 93+ Lakh and same has been sold for 1+Cr. Is that means Income exceeds original cost of acquisition. Please clarify. |
 |
Opening Rs 9304925.48
Additions Rs 9347902.66
Less Sale Value Rs13336875.00
________________
Balance WDV Rs 5315953.14
________________
There won't be any capital gain because neither the WDV is negative nor the block is ceased to exist. The depreciation will be calculated on the balance WDV.
The sale value will be compared with wdv of the Block and not with the particular assets.
| Originally posted by : CA Manish Malu | ||
|
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Originally posted by : CMA Bhaskar Unnikrishnan MBA Got confused guys: Office buildings are acquired for 93+ Lakh and same has been sold for 1+Cr. Is that means Income exceeds original cost of acquisition. Please clarify. Opening Rs 9304925.48 Additions Rs 9347902.66 Less Sale Value Rs13336875.00 ________________ Balance WDV Rs 5315953.14 ________________ There won't be any capital gain because neither the WDV is negative nor the block is ceased to exist. The depreciation will be calculated on the balance WDV. The sale value will be compared with wdv of the Block and not with the particular assets. |
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Cleared... Your words in Bold clarified my doubt. Thank you mate...
CAclubindia
