Reporting income generated from sale of car for professional filing under section 44ADA

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A doctor filing under Section 44ADA needs guidance on reporting income from selling a car. Although capital gains may not apply if other business assets remain, the sale proceeds should reduce the block of assets. This adjustment doesn't typically impact the presumptive income calculation under Section 44ADA when using the no-accounts method.

Aarush Upadhyaya

Aarush Upadhyaya (Querist)

23 July 2024 My father, a doctor, has been filing return under section 44ada since 2019. He had sold his old car last year (August 2023) for 97000. Total WDV on all cars (he had two cars) as on 1st April 2023 was 683000. WDV of the sold car as on 1st April 2023 was 42000. Prior to filing under section 44ada, depreciation had been availed on both cars.
My questions are: even though capital gain is not applicable in his case because he still has one car (block of assets exists and is non-zero), how to report profit on car sale ?(since WDV of sold car was lesser than sale amount). He is using no accounts case to file under section 44ADA.
Is it necessary to file details of the sale of car under capital gains on depreciable assets, even though there is no CG?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

23 July 2024 Being business asset, capital gains doesn't apply here. Reduce the sale consideration from the block of assets. Continue depreciating the assets as usual. It doesn't make difference in profits under presumptive assessment u/s. 44ADA IT act.

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Aarush Upadhyaya

Aarush Upadhyaya (Querist)

23 July 2024 Thank you so much sir, for a prompt and precise answer! Really grateful.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

23 July 2024 Most welcome.

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