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-
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A - (B + C) |
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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; |
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|
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. |
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|
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.
