Section 50A - Computation of capital gains in case of Depreciable Assets - Income Tax - Ready Reckoner - Income Tax

Section 50A : Special provisions for Computation of capital gains in case of Depreciable Assets Where the capital asset is an asset forming part of block of assets in respect of which deprecation has been allowed under the Act, then short term capital gain shall be computed as under: Where the total sales consideration arising as a result of transfer of one or more capital asset forming part of the block of assets exceeds the aggregate of the following: Expenditure incurred wholly and exclusively in connection with transfer. The WDV of the block of assets at the beginning of the previous year and The actual cost of any asset falling within the block of assets acquired during the previous year. Then, such excess shall be deemed to be short term capital gains. Where any block of assets ceased to exist for the reason that all the assets in that block are transferred during the previous year, then the following shall be deemed to be Short-term capital gains: Sales consideration in respect of the transfer of assets Less: W.D.V of block of assets at the beginning of the previous year The actual cost of any asset falling within the block of assets acquired during the previous year. Expenditure incurred wholly and exclusively in connection with transfer. Short term capital gain HIGHLIGHTS OF SECTION Since depreciation is charged on assets, capital gains is always short term. No indexation done on these assets. Capital gain is computed only when all the assets of block is transferred (block comes to an end) or when some of the assets of block is transferred but selling price exceeds the value of block.