Written down value of a block of assets as on 1st April 2017 was ₹4,00,000. On 12th May, 2017, an asset belonging to the same block was purchased for ₹2,00,000. Suddenly a fire broke out on 18th October, 2017. Rate of de
CS Professional · Advanced Tax Laws and Practice · PYQS · December 2018
Written down value of a block of assets as on 1st April 2017 was ₹4,00,000. On 12th May, 2017, an asset belonging to the same block was purchased for ₹2,00,000. Suddenly a fire broke out on 18th October, 2017. Rate of depreciation on the asset is 15%. Compute the amount of capital gain, if any, in each of the following cases: All the assets are destroyed by fire and the company receives ₹10,00,000 from the Insurance Company.
Answer & Explanation:
Computation of Amount of Capital Gains if all the assets are destroyed by fire and the company receives ₹10,00,000 as compensation from an insurance company Particulars Amount (₹) Assets as on 01/04/2017 4,00,000 Add: Assets purchased on 12/05/2017 2,00,000 Total 6,00,000 Less: Money received from Insurance Co. to the extent of WDV (6,00,000) WDV of the block of assets Nil Consideration received from an insurance company 10,00,000 Less: WDV of the block of assets upto fire accident (6,00,000) Short Term Capital Gains u/s 50 4,00,000
Topics: Income Tax Act, 1961
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