Treatment of sale of depreciable asset in income tax and companies act

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This discussion clarifies the tax treatment of selling depreciable assets. While profits or losses may appear in your P&L account, Section 50 of the Income Tax Act states that if the asset block still exists, the sale isn't taxable. The advice is to show the profit in your books' P&L but exclude it from taxable income during tax computation. For ITR 6, this exclusion should be made within Schedule BP.

Jerin Joseph

Jerin Joseph (Querist)
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02 October 2023 As per section 50 of the income tax act if the block still exists, the sale of asset will not be taxable.
But when we sell a particular asset the will be profit or loss in the P&L a/c.

I want to ask the taxation of the profit shown in the books.
and if not taxable , how should we show it in ITR 6, should i even show it in P&L ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 October 2023 Show it in P&L in the books, while income tax computation exclude it from taxable income.

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Jerin Joseph

Jerin Joseph (Querist)
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02 October 2023 Thank you for the answer sir.
Can you please tell me how i can exclude this income from ITR 6,
I tried looking in schedule BP and Schedule other information, but i did not find a column that excludes income from profit and loss and does not show it anywhere else.
Once again thank you for the help

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 October 2023 Go to schedule BP and exclude it.

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