Profit on sale of fixed asset
This query is : Resolved
SHYAMLAL KAYYARUVATH
(Querist)
17 February 2012
Dear sir,
What is the treatment of profit on sale of fixed assets while calculating the income tax?
What is the treatment of profit on sale of fixed assets while calculating the income tax?
CA PARAS BAFNA
(Expert)
17 February 2012
In income tax we have to follow block method. Assets bearing the same depreciation rates are considered under a single block.
When any of the asset is sold from the block, the amount is credited to the block, and correspondingly the block value gets reduced. In case there is no other fixed asset in the block, the resulting WDV is treated as Short term capital loss/profit.
.
When any of the asset is sold from the block, the amount is credited to the block, and correspondingly the block value gets reduced. In case there is no other fixed asset in the block, the resulting WDV is treated as Short term capital loss/profit.
.
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