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CS Executive · Tax Laws and Practice · Profits and Gains from Business and Profession

Under Schedule X of the Income-tax Act, 2025, an asset was acquired as per the special scheme using the specified account. When is the cost relatable to the deduction deemed to be business profit?

The relatable cost becomes deemed business profit if the asset is sold within eight years from the end of the tax year of acquisition, except where the buyer is a specified person such as the Government, a local authority, a statutory corporation or a Government company.

  1. AWhen it is sold to any person within eight years from the end of the tax year of acquisition, unless sold to a specified person such as the GovernmentCorrect
  2. BWhen it is sold to any person at any time after acquisition, including to a Government company
  3. CWhen it is sold to a Government company within eight years
  4. DOnly when it is sold after eight years

Explanation

Paragraph 5(1) applies where the asset is sold or transferred before the expiry of eight years from the end of the tax year of acquisition. Paragraph 5(2) exempts a sale to a specified person, including the Government or a Government company. Hence only the first option is correct.

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