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Capital gain on Sale of depreciable assets

Tax queries 5978 views 1 replies

When a depreciable asset being a machine  has sold from a Partnership Firm for an amount exceeding/lesser than its written down value, whether it is taxable as a capital gain/loss or business income/loss. (Machinery Acount contains other machine Also)

What is the amount to be deducted from machinery account ?  Either WDV of the same Machine or Net sale proceeds

Replies (1)
Friend, As per Income Tax Act, any difference between sale proceeds and WDV of the machinery will be dealt in following ways : a) still other machinery exists in the block - reduce the sales proceeds from the WDV of the block b) still other machinery exists in the block but sale proceeds exceeds WDV of entire block - the excess of sale proceeds over WDV of the block will be treated as "Short term gain/loss" c) no other machinery in the block other than sold one - the gain/loss from the sale transaction will treated as only "Short term gain/loss" Net sale proceeds = Gross sale proceeds - exps. incurred in connection therewith


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