Tax with respect to asset purchase

Hi All,

Could you please tell me what are the tax provisions attracted in asset purchase? Information regarding slump sale and stock in trade not required

Please help, its urgent.

Thanks in advance,

Candy.

Replies (1)

There is no tax on purchase of asset with regards to Income-Tax. you would be entitled to claim depreciation on the asset purchased at the specified rates while computing your taxable income.  

From VAT point of view & if you are carrying on manufacturing business also, you would be able to claim set-off on VAT paid on teh purcashe of asset from your VAT Liability for the month.  With regards to excise duty liability you would be able to claim 50% Cenvat Credit on teh Excise Duty charged on teh asset while paying your excise duty liability for the period in teh first year of teh purcahse of asset & teh balance can be claimed in the subsequent years.

However after a period of time when you sell the asset, you would be requried to pay short term capital gains tax if the block of Plant & Machinery becomes Nil after sale of the asset, if ther block still exists after sale of machinery then you need not pay any STCG Tax. 

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