Team Lead
7558 Points
Joined November 2011
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.