Land purchased for Rs. 1 Lac in 2008 and sold in the year 2021 for 2.50 Lac
What are the journal entries will be in entries while doing capital index / booking of loss / gain
please explain in details
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Loss on sale of land
Replies (8)
Quick Summary
For accounting purpose cost of inflation index won't be consider.
Cash/Bank A/c. Dr. 2,50,000
To land A/c. 1,00,000
To gain on sale of land A/c. 1,50,000
Cash/Bank A/c. Dr. 2,50,000
To land A/c. 1,00,000
To gain on sale of land A/c. 1,50,000
Land index value on 2021 is 219708 and the difference of 119708 not required to enter in tally during sales??
Then how gain or loss will be calculated
Please explain
As per accounting we will follow historical cost method hence you should post above mentioned entry in tally.
but as per income tax while you are showing gain/loss on sale of asset you should follow CII method of calculation for cost calculation.
but as per income tax while you are showing gain/loss on sale of asset you should follow CII method of calculation for cost calculation.
In Tally we will book Gain of Rs.1.50L and while calculation of I Tax we will consider 250000L - 219708L ( Index value) =30291/- ??
Exactly
Thanks so much for your clarification and early reply
That's okay RAJ😊😊
Accounting is different from computing income under income tax act. please dont get confused
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