No Depreciation Claimed on Business Asset ? No Application of Sec. 50 Then !

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Under Income Tax Act , sale of a business asset on which depreciation is claimed is affected by the provision of section 50 of the I.T.Act that provides that the gain if any shall be treated as short term capital gains. In other words, if plant or machinery or buildings or any other capital asset which was used by the person for business purpose and later disposed off for a consideration , in that case the computation of gains will be in accordance with provision under section  50 . The question however is  “Whether the provision u/s 50 apply of a person does not claim depreciation under Income Tax Act  , even if such a capital asset is part of block of asset ? . This post clears the air and concludes that there will be no application of provision u/s 50 if no depreciation was claimed ever on the asset.

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