An asset purchased on 01.04.11 for Rs.100000. Depreciation is charged on SLM basis @ 10%p.a.WDV as on 01.04.13 is Rs.80000. Asset is sold on 30.09.13. For the purpose of calculating profit or loss on sale of fixed asset what will be WDV on 30.09.13????????????
80000*10/100*6/12=4000
OR
100000*10/100*6/12=5000
Asstes purchased on 1.4.2011 1,00,000
Depr 31.3.2012 10,000
w.d.v. 31..3.2012 90,000
opening 1.4.2012 90,000
depre 10,000
w.d.v 80,000
opening 80,000
depre (10,000*6/12) 5,000
w.d.v. on 30.9.2013 75,000
yes, w.d.v. on 30.9.2013 will be 75,000
75000 is correct answer
If it is your personal asset, then u can consider the depreciation method & rate as per your estimation on the basis of probable life of such asset in the market or rate as per income tax, to get the WDV for the purpose of calculation of probable profit or loss on the asset. And there will be no income tax (as these are considered as personal effects) or wealth tax [as these assets are not defined as asset u/s-2(ea) of Wealth Tax Act]. In case of personal capital asset like jewellery, archaelogical collections, drawings, paintings, sculptures or any work of art, income tax will be charged u/h "capital gain".
On the other hand, if it is your business asset, provisions of block of assets u/s-2(11), WDV u/s-43(6) of Income Tax Act will be applicable.
hello all fnds
If its accounting point of view than as per 6m & if its taxation point of viea than only the concept of 180 days would be applied over here.
Thanks
Dear Parul,
As per your Query Please find below answer.
Assets purchased on dated 1-4-2011 = 100000.00
so Dep charged for full year @ 10% on purchase value = 10000.00
Balance B/D on 31.3.12 = 90000.00
opening Balance on 1.4.12 = 90000.00
Then ful year Depa Charged @ 10% on Purchase Value (SLM)= 10000.00
Balance B/D on 31.3.13 = 80000.00
Opening Balance on 1.4.13 = 80000.00
as per your query assets sold on dated 30.9.2013
so dep will be charged on Assets Value for 6 Month = 5000.00
so at the end of the month of september 2013 Asset value by SLM method = 80000-5000= 75000.00
You can also calculate profit/ loss from these amount
for calculate please use the formula = Balance - Dep - Sold
Like balance of The Assets on dated 30.9.2013 = 80000.00
Dep = 5000.00
so loss/ Profit = 80000-5000-? = Profit/Loss
as per companies act depreciation charged proposnately so wdv 75000
as per income tax act ,in the year of sale depreciation shold be not charged
CAclubindia
