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Fixed assed profit

Sahil garg (Accountant) (52 Points)

29 May 2021

dear seniors please tell me of we have a car in fixed asset and every year we claim depreciation on it then profit of sale of that car we have to show in capital gains. then indexation cost is applicable on it or not.

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18 Replies

CMA Poornima Madhava (CMA) (13097 Points)
Replied 29 May 2021

No indexation benefit in respect of depreciable assets. Gain/loss on the basis of WDV will be taken to P&L account.

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 29 May 2021

No indexation cost is not applicable. Take the profit to
P/L account

Sahil garg (Accountant) (52 Points)
Replied 29 May 2021

Dear sir
when i put the figures in depreciation chart it will auto take it in capital gain . please clarify what i have to do

Gagan Gupta (Chartered Accountant) (161 Points)
Replied 30 May 2021

No indexation will be allowed. Further nature of capital gain /loss would be short term.

Ankit Neema (2742 Points)
Replied 30 May 2021

No indexation on depreciable asset, and you op. wdv is your cost of acquisition. The difference between the op. wdv and sale value is your capital gain/Loss.

2 Like

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 30 May 2021

Agree with my previous answer

Sahil garg (Accountant) (52 Points)
Replied 30 May 2021

Sir when i feed entries in my software clear tax it will take into capital gain or any other tax filling software

Ankit Neema (2742 Points)
Replied 30 May 2021

In software it will calculate gain automatically, for further msg me

1 Like

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 30 May 2021

There will be no problem in case capital gain will be calculated

Sahil garg (Accountant) (52 Points)
Replied 30 May 2021

So sourav sir where we treat the entry in capital gain or profit and loss account

AKN FINANCIALSERVICES (146 Points)
Replied 31 May 2021

Agree with Ankit Ji

1 Like

Sahil garg (Accountant) (52 Points)
Replied 31 May 2021

Dear ankit ji please clarify it in breifly.. software is calculating tax as per short term capital gain instead of profit and loss

Sivaramaraju G (Learner) (2398 Points)
Replied 31 May 2021

If you are calculating this gain for individual, gain or loss will be Cr/Dr to capital account.

in any other case it will go to PandL and in income tax act sale amount deduct from plant and machinery block. after deduction if any balance is there then calculate dep on it. if there is no asset in the block then short term cap gain or loss will arise.