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Scientific research asset u/s 35(2ab)

Anmol Juneja (Student) (104 Points)

22 March 2017

1) Scientific research asset, for which deduction (200%) has been allowed u/s 35(2AB), is subsequently sold. Tax implications when sold without using in business? [ sec 41(3) doesnt mention sec 35(2AB)] 2) What would be actual cost if brought into business bcz explanation 1 to sec 43(1) only talks about 35(1)(iv)?

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(Guest)

/articles/section-35-of-income-tax-act-a-student-s-guide-25865.asp

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Anmol Juneja (Student) (104 Points)
Replied 22 March 2017

samir thanks for ur rply but sec 41(3) only talks about 35(1)(iv) not 35(2AB). I've seen the link there only sec 35 is written but for your ref m reproducing sec 41(3) below:- " Where an asset representing expenditure of a capital nature on scientific research within the meaning of clause (iv) of sub-section (1), or clause (c) of sub-section (2B), of section 35, read with clause (4) of section 43, is sold, without having been used for other purposes, and the proceeds of the sale together with the total amount of the deductions made under clause (i) or, as the case may be, the amount of the deduction under clause (ia) of sub-section (2), or clause (c) of sub-section (2B), of section 35 exceed the amount of the capital expenditure, the excess or the amount of the deductions so made, whichever is the less, shall be chargeable to income-tax as income of the business or profession of the previous year in which the sale took place." and plz rply my 2nd query about actual cost.

(Guest)

search in u tube with pgbp head

some time sections slient about facts where we have to assume some thing

with respect of requirement (go through bare act and incometax recknor also )

any thing effect to profit of company then better to consult professional

1 Like

Anmol Juneja (Student) (104 Points)
Replied 22 March 2017

thanks samir, so i m supposed to take sale value upto ded u/s 35(2AB) as pgbp and above that as cap gain....right

Anmol Juneja (Student) (104 Points)
Replied 22 March 2017

what about my 2nd query related to actual cost?

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Anmol Juneja (Student) (104 Points)
Replied 22 March 2017

What would be actual cost for block of assets if brought into business bcz explanation 1 to sec 43(1) only talks about 35(1)(iv)?

CA V KARTHICK (Chartered Accountant in Practice) (506 Points)
Replied 22 March 2017

Under second situation if the asset is brought into business use... the deduction earlier allowed will be taxable under sec 41(1)... the cost of the asset would be Nil and no depreciation would be allowed under sec 35(2)(vi)