Clause 42 - Computation of proft on transfer of a business capital asset. - Direct Taxes Code, 2010

Computation of proft on transfer of a business capital asset. 42. (1) The amount of profit, where a business capital asset, which forms part of a block of assets specified in the Fifteenth Schedule, is transferred discarded, destroyed or destructed shall be computed in accordance with the formula- A-(B+C) Where A = the amount accrued or received in respect of such asset, which is transferred, discarded, destroyed or destructed during the financial year together with the amount of scrap value, if any; B= the amount of written down value of such block of assets at the beginning of the financial year; C= the actual cost of any asset falling within that block of assets, 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. (3) The amount of profit, where a business capital asset other than that referred to in sub-section (1) is transferred, discarded, destroyed or destructed, shall be computed in accordance with the formula- A-B Where A = Amount accrued or received in respect of the asset which is transferred, discarded, destroyed or destructed during the financial year together with the amount of scrap value, if any; B= The actual cost of the asset.