Treatment of Profit on sale of fixed assets

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This discussion clarifies the accounting and tax treatment for profits made on the sale of fixed assets. Typically, sale proceeds reduce the asset's block value. If a profit arises, it's not immediately accounted for but is recognised as a short-term capital gain when the asset block ceases to exist.

Sulafa S.V

Sulafa S.V (Querist)

19 July 2025 Could you please explain the accounting treatment and tax computation for the sale of a fixed asset when there is no capital gain or loss?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 July 2025 Generally the sale proceeds gets reduced from the block of assets.

Sulafa S.V

Sulafa S.V (Querist)

19 July 2025 In case of profit on sale of fixed assets, what is the treatment sir?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 July 2025 The total amount is credited to the block of assets, so the profit is not accounted. Whenever block of assets ceases to exist, then the profit is considered as Short term capital Gain.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

25 September 2025 Good luck...

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