Depreciation and capital gain.

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Querist : Anonymous

Querist : Anonymous (Querist)

24 February 2013 Dear Sir,
Here my query is that
1)Mr.X purchase new car Rs.150000/-(Buy dt.30/09/2012) in replacement of old car which value as per balance sheet is Rs.25000/- (buy dt.02/04/2007) but received replacement amount 35000/-. I want to know that his old car is liable to capital gain & also for depreciation ??

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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25 February 2013 Capital gain on depreciated assets is only Short-term capital gain and its arises only at the time of such block of assets WDV becomes zero or negative. In that case short term capital gain shall be consider as follows.

Short term capital gain = Sales consideration - WDV of such block as on the last closing financial year.

IN your case you purchased new car on 30/9/2012 and on the same day you sold the old car so WDV of such block of asset on that date either not zero or negative(assume only such car is on that block of asset). So capital gain not arises.

OM SAI SRI SAI JAI JAI SAI

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