Depreciation

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Dinesh Sharma (Querist)
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11 September 2012 Sir,
My client is Pvt. Ltd. and it have two Truck for the use of business and purchase Rs. 400000 each. As on 1.4.11 opening WDV is Rs.170000 of each truck as per company act and opening WDV as per Income Tax is Rs.36000 of both trucks. But 27.02.2012 one truck sold of Rs.132000.
What treatment under company act and Income tax act.
Please reply soon

Guest

Guest (Expert)

11 September 2012 In companies act:
1. Calculate & book profit/loss on sale of asset after charging depreciation for the period of use i.e. from 1.4.11 till 27.2.12.
2. On other truck charge depreciation as normal procedure.

In Income Tax:
1. In IT the concept of block of assets is there & in the above case since the sale value is more than that of WDV the balance amount will be chargeable as capital gain. The block will be reduced to nill.