Computation of capital gains in case of depreciable assets.: Clause 74 of Income Tax Bill, 2025 vs. Section 50 of Income-tax Act, 1961

Computation of capital gains on depreciable assets: revised short term treatment under an overriding block based formula.

Clause 74 creates an overriding framework for computing capital gains on depreciable asset blocks: if consideration from transfer exceeds transfer expenses plus the block's written down value at the year's start and additions during the year, the excess is treated as short term capital gains; on complete cessation of a block, acquisition cost is the opening written down value adjusted for acquisitions and resulting income is treated as short term capital gains.