CAPITAL GAIN ON SALE OF OFFICE PROPERTY.

[GOPAL KHETAN]

I have a office property/commercial premises, on which I used to conduct my propreitorship business.For the past 5 years,I have joined another co. as a director, and have rented out this office premise,and  showing the income as income from House property.

My question,is that I have received a good offer for this property for outright sale, in the event,I sell this property,and invest the proceeds in another commercial premises, which would again be rented, would this attract capital gains tax.

Please advise.

AI Summary

Capital gains classification on sale of commercial premises depends on depreciable-asset status and depreciation claim.
Capital gains treatment on sale depends on whether the office was a proprietor's fixed (depreciable) asset with depreciation claimed-leading to short term capital gains-or whether depreciation was not claimed and the property was reclassified as an investment property, in which case the date of conversion determines short term or long term classification.