Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Sale of asset

Tax queries 393 views 1 replies

Shubham Sarda

ARTICAL ASSISTANT

63 Points Posted on 02 July 2014

HELLO EVERYONE,

A COMPANY HAS 3 VEHICLES. OUT OF WHICH COMPANY SALES 1 VEHICLE FOR RS. 400000/- ON 26/11/2013. THE COST OF THE VEHICLES WAS RS. 784924/- WHICH WAS APPROXIMATELY PURCHASED IN THE YEAR 2011-2012. ACCUMULATED DEPRECIATION UPTO 31/03/2013 ON THIS PARTICULAR VEHICLE WAS RS. 209984/- . DEPRECIATION UPTO THE DATE OF SALE AMOUNTED TO RS. 97875/- (01/04/2013 TO 25/11/2013). SO WE CAN SEE THAT THE VEHICLE WAS SOLD FOR LOSS OF RS. 77065/-

MY QUERY IS, WILL ANY TAX IMPLICATIONS ARISE OUT OF THIS - ?

WHAT WILL BE THE ACCOUNTING EFFECTS - ?

PLEASE RESPOND AS SOON AS POSSIBLE.

THANKING YOU,

Replies (1)

vishal

Chartered Accountant

67 Points Posted on 02 July 2014

For the purpose of Income tax block of asset should maintained and depriciation should be calculted as under:

Op. WDV of the block : XX

(+)Acquisition during the year : XX

(-) Sale during the year : XX

Cl. WDV of the Block : XX

Depreciation on above WDV (whole Depreciation if newly acuired asset was first put to use for more than 180 days or else 50%) should be charged to P & L Account.

For the purpose of Companies act depreciation shall be calculated days wise for each asset as per the rates specified in schedule 14.

AS 6 on depreciation and AS 22 on Deferred Tax should be taken into account for accounting purpose.