l Capital gains tax Taxation of capital gains is realized when capital assist

L capital gains tax taxation of capital gains is

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l) Capital gains tax: - Taxation of capital gains is realized when capital assist is disposed off and process exceed the cost incurred in acquisition the assist. 3.4 Method of valuation of building: - There are three type of method of valuation of building: - 1) Book value method. 2) Present land value method. 3) Rental method of valuation. Property used for special purpose of general range of commercials as well as residential properties for school, police station or perform non profitable community function where is no direct evidence of income, valuation of such property are made in this method. Valuation for under development or owner occupied or vacant possession which is done this method of valuation. The basis principle or valuation by this method is final individual market value of land and also individual depreciated buildings. - Methods are explain as follows: -
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1) Book value method: - It a simplest method of valuation which adopted for property which not do fetch any rent of owner. This method is suitable for recording valuation assist the balance sheet of companies of government office record. By know original cost of construction, the depreciation cost for past life is calculated by straight line method. Book value is calculated by subtracting depreciation cost from original cost of construction plus original cost of land. Book value = original cost of construction – depreciation by straight line method + original cost of land. Draw back of this method is value obtain is less than real value and this method are doing not use in practice. 2 ) Present land value method : - Original cost of land is taken for determination the valuation of property this are explain as book value method, but even though the value of building depreciation, the value of land which is building is constructed. Time calculate valuation of property, instead of original cost of land, the present market value of land is taken by comparing the land under considering. Valuation of property = original cost of construction – depreciation for past life + present market value of land. 3) Rental method of valuation: - This method is adopted if building is used on rental basis or when probable rent from building can finally by local enquiry. Procedure of rental method explain as follows: - a) Find out gross rent from property from original rent collection or by making local enquiries in area. b) Calculate all outgoing to the property is subject. c) Work out net rent from property by substrate total outgoing from gross rent. d) Assume suitable rate of interest by comparison with rate of interest is offer by national bank and government security and find out year purchase. e) Y. P = 100/ assume rate of interest. f) Find capable value of property by multiplying net income by year purchase. 3.5 Some definition: 1) Price: - The amount worked out adding the cost of production, interest on investment, reward to producer for his labour and risk.
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