Ugent Please: Tax Question on Depreciation

Any members please answer the below question.. Its urgent.

Paloo Limited furnishes details for the previous year 2008-09

i) Profit before Depreciation - Rs.10,00,000

ii) WDV of Machinery as of 1st April 2008 Rs. 10,000,000  (Dep rate 15%)

iii) Money receivable in respect of a plant on 1st March 2009 - Rs. 11,20,000

iv) Selling expenses in respect of sale of P&M - Rs.20,000

Analyst the tax implication of the above. Could you suggest a scheme of tax plannig?

 

--- Anybody can solve this question for MBA paper please ? Thank you so much in advance.

Replies (5)

 

1.Profit before depreciation – Rs. 10,00,000.00

2. Depreciation @ 15%  -     (-)  Rs.   1,50,000.00

                                                     --------------------------

                                                             8,50,000.00

3.I assume Machinery and plant both are different assets in your books. So first calculate depreciation on it and than back amount recd in above calculated amount…..

4. selling expenses will also minus after calculation with 3rd point…..

opening WDV    10,00,000

additions             nil

sold                     11,00,000

 

closing value for for depreciation  ---        ZERO

therefore,

there is no depreciation for FY 2008-09

 

and short term capital gain of 1,00,000 will araise...

I agree with Mr.Ramya assuming that you have mistakenly written the fig of 1crore instead of 10lakhs in WDV on 1st Apr

Thanks All... That was quick :-)

Today only I joined CA Club India. I am happy

 

@ All and @ Ramya.. u r right The figure was 10 lakh and not 1 crore

i agree with ramya

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