Depreciation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 August 2013 Car 2012-13

Opening WDV for two cars - 100000
Sold one Car - (50000)
Wdv for sec 32 - 50000
Depreciation @ 15% - 7500

CAR 2013-14

Please Calculate dep for 2013-14

Treatment for Quantum of dep for the car sold in 2012-13

CA Rinkal

CA Rinkal (Expert)
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19 August 2013 50000-7500=42500 will be wdv for the year 2013-14

depreciation for the year 2013-14 = 6375
(Please use concept of Block of Asset)

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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19 August 2013 WDV as on 31-3-2013 is 42,500 so you have to calculate depreciation @15% on 42,500 for income tax purpose.

During 2012-13 credit the sale value of the car to the CAR account(fixed assets account). In case if you sold such car for more than or lower than the book value of the car then such difference amount shall be credited or debited to the profit and loss account and the same shall be disallow or deduct at the time of preparation of computation of total income.

Entries for the sale of car

Cash/bank a/c dr (for total sale value)
To Car a/c (for Book value)
To gain on sale of car (For sale value - book value)

In case of sold less value than book value then

Cash/bank a/c dr (for total sale value)
Loss on sale of car a/c dr (for book value - sale value)
To Car a/c (for book value)

after that loss or gain on sale of car shall be transferred to profit and loss account.

In case if you want to WDV as per books and as per IT is same then you required to pass the following entry only

Cash/bank a/c dr (for sale value)
To Car a/c (for sale value).

OM SAI SRI SAI JAI JAI SAI

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