Capital Gain on Sale of Shop Premises

[Mihir Modak]

The shop premises were used as retail store for many years. The income tax return is filed under 44AD for all past years. Accordingly no depreciation was shown separately in returns. Now the shop is sold. whether it will be considered as depreciable asset for calculation of capital gains?

AI Summary

Under Section 44AD, presumptively taxed retail shop treated as depreciable asset; capital gains computed using deemed WDV A shop used as a retail store and taxed under the presumptive scheme (44AD) where depreciation was not separately claimed will nevertheless be treated as a depreciable asset for capital gains purposes because the law deems the written down value and depreciation to have been calculated and allowed under the presumptive regime; therefore capital gains on sale should be computed taking the deemed WDV/depreciation into account despite no separate depreciation entries in prior returns.