sale of Asset

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survesh (Querist)
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16 September 2009 Hi Friends,

a piping contractor in tax audit ac asset is sold from the balance sheet ac the Profit of Loss calculated is after dep. or No Dep.
Eg: Truck Rs.50000.00 Dt:1/4/2008 is sold in 30/9/2008 for Rs.60000.00 there is a profit of Rs.10,000.00 should dep charged for 6 month or for the year 12 months. Profit on asset sale under which A/c Group in Tally.

Regards

Shyam Lal Naik

Shyam Lal Naik (Expert)
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16 September 2009 Depreciation for accounting purpose.

You may charge depreciation for six month for accounting purpose and show the profit under indirect income in tally.

Depreciation under Income Tax Act.

Under Income Tax act, depreciation is allowed WDV of block of assets as at the end of the year.

Block of asset means all assets falling under the same asset class eligible for same rate of depreciation.

WDV as at the end of year = WDV at the begining + addition - sales.

As such, profit / loss on sale of fixed assets does not arise, unless the WDV of the block of asset is reduced to zero.

CA Gangadhar Mishra

CA Gangadhar Mishra (Expert)
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16 September 2009 agree

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