Regarding sale of asset.......

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Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2012 sir,
suppose,i purchased an asset in 10 years back at an amount of rs. 1000000. Today its w.d.v is 100000. if i sale it rs. 2000000 than what should be its treatment in income tax. Is fully rs. 1900000 is STCG or 900000 is business profit and 1000000 is STCG? and what is tax liability? and only one asset is in block.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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26 June 2012 As per Section 50, where a depreciable asset is sold and the sale price exceeds the WDV, the difference between the sale price and WDV shall be taxable as STCG.

So, in this case, Rs. 19 lakh (20 lakh - 1 lakh) shall be taxable as STCG u/s 50.

Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2012 thanks......

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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26 June 2012 You are welcome. You should use the thanks button to convey your thanks.

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Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2012 sir, can u explain what amount of tax rate is applicable....and what is tax amount?

sir, if it is related with electrical installation or building or plant & machinery, answer will be same or differ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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26 June 2012 1. The STCG shall be taxable at normal rates (slab rate in case of individual & HUF and 30% in case of company/firm).

2. Answer will be same for ALL depreciable assets.

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Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2012 sir, one more question is that if i purchased an asset in 1 april 2010 and sold it 31 july 2011. than depreciation will charge only for 2010-11 or 3 months more for 11-12....in case of income tax....not according to companies act.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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27 June 2012 Under Income Tax Act, depreciation is admissible only on those assets which are existing at the END OF THE YEAR.

There is NO concept of depreciation for part of the year in income tax.

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