For the sale of a Long Term Capital asset being a Building,
is it treated as long term capital gain in case of individual assessees and treated as short term capital gain in case of a Business or Profession for being a depreciable asset.
I also want to know whether the " sale of depreciable asset is always a short term capital gain " is applicable on for assessees other than the individuals ( in the sense that only for business entities as depreciation is available only for them ).
Only if building is used for business purpose & depreciation claimed then it will always be STCG. In all other cases it will be LTCG.
Say there is a building held by a assessee for business purpose. So its a depreciable asset.
But that asset was not available for use in the previous years ( with reference to passive use of an asset ) before it being put to use for business purpose it is being sold.
Here, lets take the asset is satisfied to be a LTCA , will the asset be capital gains be short term as its a depreciable asset or will it be long term as no depreciation was provided for
It doesn't matter if the asset is being put to use or no. Once the asset is being installed in the office then the depreciation begins from that date & it will be considered an dpereciable asset. As per AS-6 Depreciation Accounting, depreciation is casued due to passeage of time, effluxion. So it becomes a depreciable asset & the gains arising from the slae would be STCG & not LTCG.
Triveni Turbine Limited
Bengaluru
CA
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