– The term “Capital Income”means an income which does not grow out or pertain to the running of the business proper.
05/02/2009Dr Sarbesh Mishra2
Cost of the Building – 1,00,000/-Selling Price of the Building – 1,50,000/-Capital Profit = 50,000/-Which implies profit realised over and abovethe cost of the fixed asset should beconsidered as Capital Profit.
05/02/2009Dr Sarbesh Mishra3
Example:Cost Price of Plant = 1,00,000/-Book Price of Plant (After Depreciation)= 70,000/-Selling Price = 1,20,000/-Profit = 1,20,000 – 70,000 = 50,000/-So here Profit has two components namelyCapital Profit + Revenue Profit = 20,000 + 30,000