09 August 2015
A proprietorship concern has a Fixed Assets having WDV of 11000 on 01.04.2014. On 01.12.2014, this assets has been sold for Rs. 27000. Now what should be the accounting treatment as per Income Tax Act if this is the only assets of the firm?
10 August 2015
If there are assets having WDV more than 16,000 in the said block, then the said gain is not required to be computed. The same shall get deducted from the value of block of the said asset.
Coming to journal entry : Please note journal entry is passed as per ACCOUNTING principles and therefore dont try to mix up and mess up your time in passing the journal entry as per Income tax.
Journal entry as per accounting principle is same in either case. date 01/12/2014 Debit cash/Bank 27000 Credit the said fixed asset 11,000 Credit Profit on sale of fixed asset 16,000
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