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exemtion u/s 54F

VINEET NAHATA (STUDENT) (107 Points)

15 October 2010

can a short term capital gain arising on sale of a long term depreciable asset be exempt u/s 54F

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12 Replies

CA bhargava (CA) (2017 Points)
Replied 15 October 2010

Boss...Depreciable asset can never attract Long term capital gains.....

It is always short term only even if u hold them for more than 3 years in the Business...

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CA. Abhishek K. Pandey (Manager (Advance)) (901 Points)
Replied 15 October 2010

No, Exemption will not be available. Abhishek K. Pandey

Puneet (learner) (105 Points)
Replied 16 October 2010

No sir,

Long term capital gain is not allowed on Depriciable asset. it will always be a short term capital gain.

Akshay Malpani (CA - Partner MRO& Associates) (120 Points)
Replied 16 October 2010

Originally posted by : VINEET NAHATA
	can a short term capital gain arising on sale of a long term depreciable asset be exempt u/s 54F

As per the recent case law in this regard, it has been held that Section 54F contains that in order to claim exemption it should be Long Term Capital Asset. Depreciable Asset is in fact long term capital asset but according to Income Tax Act,1961 it has been held that profit or loss arising out of sale/discard etc. should be traeted as Short Term Capital gain /loss (as the case may be). So nothing in this section restricts the assessee from claiming exemption for depreciable asset.

C.A. Parin Poojara (Chartered Accountant) (90 Points)
Replied 16 October 2010

Depriciable Assets never fall under the section 54F. Section 50C is applicable. And according to which it is STCG. nd no exmeption allowed.........

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VINEET NAHATA (STUDENT) (107 Points)
Replied 16 October 2010

i have dis doubt cos sec 54F talks of LTCA n not of LTCG??????

CA bhargava (CA) (2017 Points)
Replied 16 October 2010

It is long term capital gain but not long term capital asset,

U can get the clarity of the concept on Depreciable asset in Sec 50 which says that computation of Capital gain on Depreciable asset ,Which is always Short term but not long term.

C.A. Parin Poojara (Chartered Accountant) (90 Points)
Replied 18 October 2010

hey realy i apriciate ur question. Yeah u may b right coz in Sec 54f it is written "Capital gain arising on the transfer of long term capital assets...." here it is not said that long term capital gain but rather it is written that capital gain which should be any long term or even short term, arising on transfer of long term capital. So capital gain arising on sale of long term depriciable assets is short term capital gain u/s-50A which may be exempt u/s-54f. i will tell after refering other prov if any for that.

C.A. Parin Poojara (Chartered Accountant) (90 Points)
Replied 22 October 2010

Hey Vinit....

I have conformed about this from my sir that u can get exemption Us-54f provided such assets is long term.

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 22 October 2010

Hi Friends,

Capital gain on sale of depreciable asset would always be considered as short term capital gain and as such benefit of section 54F would ot be available as it is available only for long term capital gain. Since the capitalgain/loss on sale of depreciable asset would be considered as shrt term capital gain always, benefit under sec 54F would not be available.

Regards,

manoj

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CA Vijay Jain (Chartered Accountant) (176 Points)
Replied 22 October 2010

The exemption on short term capital gain is expemt only for 54 BDGGA samjhe

C.A. Parin Poojara (Chartered Accountant) (90 Points)
Replied 22 October 2010

Dear All

I am not agree with all of u. STCG on depriciable assets can be eligible for exemption U/s-54F.

Because in Sec-54F it is clearly written that Capital gain arising on transfer of any long term capital assets, other than residential house property, shall be eligible for exemption.

That means any capital gain whether Shor term or long term is eligible for exemption under this section provided assets is long term capital assets. so we have to see the time duration of holding of capital assets whether it is hold for more than 36 months or not.

Hance capital gain arising on sale of Long term capital assets is eligible for exemption U/s-54F even though such capital gain is deemed as short term by virtue of provision of Sec-50A.

Coz in that provision it is written that such gain is deemed as short term capital gain. There is no provision which makes such assets as Short term capital assets.

So we can avail the exemption U/s -54F on capital gain arising on sale of Long term depriciable assets.

So it is requiest to all of u plz refer the provision what is says..........