Profit on sale of fixed assets
This query is : Resolved
20 August 2013
Profit on sale of fixed assets credited to profit & Loss A/C the same will be disallowed while computing the taxable income under I. T. Act in the head Business or Profession and the block of fixed assets still exists so there is no question of arising any capital gain.
Please suggest me that under which section this income will be disallowed in Business or Profession
Please suggest me that under which section this income will be disallowed in Business or Profession
CA Kumar Mukesh
(Expert)
20 August 2013
In case of Income Tax
WDV of Block of assets should be reduced by Sale Value of Asset
Two consequences will exits after this
WDV become negative- Excess over WDV will be treated as short term capital gain u/s 50
WDV & other assets still exist then only bal amt of WDV will qualify for Depreciation.
Therefore profit on sale of particular asset as calculated under Companies Act,doesn't have any influence over Tax computation
WDV of Block of assets should be reduced by Sale Value of Asset
Two consequences will exits after this
WDV become negative- Excess over WDV will be treated as short term capital gain u/s 50
WDV & other assets still exist then only bal amt of WDV will qualify for Depreciation.
Therefore profit on sale of particular asset as calculated under Companies Act,doesn't have any influence over Tax computation
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