Depreciation

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Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2013 opening wdv as per income tax- 26027
opening WDV as per company act=25957
sale of full block at Rs- 2560
is depreciation is to be charged as per income tax and as per companies act for the year in which assets sold.what will be the accounting and tax treatment of loss on sale of assets

Guest

Guest (Expert)

26 June 2013 Depreciation to be calculated on both basis.

When Balance sheet is made for income tax purpose, the depreciation as per Income tax will be made.

Then there will be short term capital loss of Rs 23467 (2560-26027), no depreciation in the year of sale.

When books are made under companies act. Then depreciation as per companies rate till the date of sale on companies WDV 25957, then such depreciation is deducted from Opening Company WDV, then such net amount is compared to sale consideration for the calculation on loss or gain,

Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2013 sir i am preparing balance sheet according to company act. then what will be the accounting treatment considering short term capital gain according to ioncome tax act 23467/-
op wdv as per company act 25957/-
less dep up to the of sale
(25957*13.91%*125/365) 1236/-
Wdv as on the date of sale 24701/-

sale consideration 2560/-

Guest

Guest (Expert)

26 June 2013 Income TAx act opening WDV will not be considered while calculating depriciation or loss for the purpose of company act balance sheet

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2013 thanku very much sir

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