Capital loss or business loss (Income Tax)

This query is : Resolved

( Author )
05 July 2012

Hi, Friend
My business is Labour consultancy and we have A motor car,since last 3 years & its WDV Rs - 268000/- and noe i sold this car for Rs- 150000/-,
Please suggest me whether
1.) i am eligible for Dep. till sale date
2.) after charging Dep can i such loss Debited to Profit & loss account
or
3.) whether it Treated as Long Term Cap loss?
4.) if yes can i c/f such loss
5.) and if yes, then which income will be adjested against such loss
Please suggest me

kanhaiya kumar agarwal

( Expert )
07 July 2012

Dear Dadasaheb,
1) Yes, you are eligible for depreciation till the date of sales of the same.
2) After charging depreciation for the period, WDV as on date of sale minus sales realisation is to be debited to Profit & Loss account as Loss on Sale of Fixed Assets.
3) As it appears there is only one motor car in the block which is sold now, the resulting Loss is to be treated as short term capital loss. Loss on depreciable asset will always be short term in nature.
4) Short term capital loss can be carried forward for next eight years (after adjusting the same against gains under the head Capital Gain.
5) The carried forward STCL can be adjusted against STCG and LTCG.