Capital gain in case of amount received from an insurer of any capital asset

Capital gain in case of amount received from an insurer on account of damage or destruction of any capital
asset u/ s 45( 1A)

Damage or destruction of assets as a result ofChargeability
1. Flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature or1. Chargeable as income of the year in which themoney or other asset was received from the insurer.
2. Riot or civil disturbance2. In case of receipt of other Assets the Fair Market Value (FMV) of the consideration the Asset is received.
3. Accidental fire or explosion3. Capital Gain = Money received or FMV of Asset received Less Cost of Acquisition or indexed cost of Acquisition.
4. Action by an enemy or action taken in
combating an enemy (whether with or
without a declaration of war)

Note for Depreciable Assets :
1. The compensation received shall be reduced from the WDV of the block and any surplus shall be
chargeable as Short Term Capital Gains and loss shall be treated as Short Term Capital Loss.
2. If some asset still exists in the block and no surplus is available, then depreciation may be claimed on
the balance.

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