Computation of tax

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vivekanand bharti

vivekanand bharti (Querist)
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19 December 2012 if a company sale machinery then how to calculate capital gain or loss of sale of machinery.

CA Neha Chauhan

CA Neha Chauhan (Expert)
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19 December 2012 Hi Vivekanand,
If the company sale machinery which is Depriciated than on sale of machinery if the sale value is more than Opening WDV of Machinery, it is treated as short term capital gain...and it is liable to tax accordingly..
Regards,
Neha Chauhan

@VaibhavJ

@VaibhavJ (Expert)
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19 December 2012 Hi

In Accounting perspective:

To calculate the gain or loss on the sale of an asset, you compare the amount of cash received for the asset to the asset’s book (carrying) value at the time of the sale. If the cash received is greater than the asset’s book value, the difference is recorded as a gain. If the cash received is less than the asset’s book value, the difference is recorded as a loss.
In order to have the book value at the time of the sale, you must record the depreciation expense up to the date of the sale.

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