Firm had a leased hold land for 99 years on which it constructed a shed in year 2003 amounting Rs 120000/- ..in year 2018 the shed was sold for 1200000/- when it's depreciated value was Nil in books of account .. how much capital gain tax would be attracted??
while selling depreciable asset like building, capital gains shall be long term capital gains as the provisios of section 50b and section 45 are distinct and do not have any bearing on each other so cg tax will be calculated in normal by indexing the cost of 120000 with 2018 index against 2003 index and same to be deducted from sale consideration of 1200000. balance will be LTCG.
as per the above question - the asset is a DEPRECIABLE CAPITAL ASSET SO, IT IS ALWAYS TAXABLE AS - DEEMED TO BE THE CAPITAL GAINS ARISING FROM THE TRANSFER OF SHORT -TERM CAPITAL ASSET (section 50/section50A) so, there is no Indexsation benefit is available
capital gains = full value consideration. less ( expenditure incurred wholly & exclusively in connection with such transfer + WDV of the block of assets at the BEGINNING OF THE PREVIOUS YEAR + the actual cost of any asset falling within the block of assets acquired during the previous year)
short term capital gains tax will arise when the block of assets from which one of the asset has been sold, ceases to exist. even when the block of assets exists, if the sale consideration received is more than the aggregate of wdv plus cost of any property purchased
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