Clause 40 - Profit on transfer of a business capital asset - Direct Taxes Code Bill, 2009

Profit on transfer of a business capital asset 40. (1) The profits from transfer of a business capital asset shall be computed in accordance with the formula- A - (B + C) Where A = the amount accrued or received in respect of the asset, which is transferred, discarded, demolished or destroyed during the financial year together with the amount of scrap value, if any; B = the written down value of,- (i) the block of asset at the beginning of the financial year if the asset forms part of the block of asset specified in the Fourteenth Schedule; and (ii) the asset at the beginning of the financial year, in any other case. C = the actual cost of any asset falling within that block, acquired during the financial year. (2) The profit referred to in sub-section (1) shall be treated as 'nil', if the net result of the computation, thereunder, is negative.