Depreciation
This query is : Resolved
07 September 2010
Suppose i hav a block of assets valued at 100 nd i sold an asset for rs 50 having cost of 40 than what wyd be the impact on my block nd if i sold it for 120 nd cost was 80 than pls guide
07 September 2010
pls
07 September 2010
In first case,you will get dep. on Rs.50 and profit on sale of asset is not liable to be taxed. In second case, there is a short term capital gain u/s50 of Rs. 20000/=.
07 September 2010
sir when do we charge balance charge bcus it states that profit upto the amount of depreciation charged is our income & remaining is Capital gain or pls correct if i am wrong
07 September 2010
IN the given Querry the WDV of a Block of Asset is Rs. 100 and the same is sold for Rs. 50, hence the block would be empty and no depreiation would be allowed . There would be a Capital loss of Rs. 50
In the second case , also the block would be empty also the sale price exceeds the Opending WDV and no depreciation would be allowed. The capital Gain arises worth Rs. 20 liable to CG tax.
In the second case , also the block would be empty also the sale price exceeds the Opending WDV and no depreciation would be allowed. The capital Gain arises worth Rs. 20 liable to CG tax.
07 September 2010
Difference of opinion
The querist has said in the first case he has sold an asset out of the block of assets.
The querist has said in the first case he has sold an asset out of the block of assets.
08 September 2010
sIR WHAT IS THE CONCEPT OF bALANCE cHARGE ND WHEN IT IS APPLICABLE SUPPOSE I HAVE MY BLOCK OF ASSETS FAOR Rs. 100 ND I SOLD A PART OF AN ASSET FOR Rs. 50 HAVING COST 40 ND WDV 2 5THAN WHAT WUD B THE IMPACT
08 September 2010
If u have sold a part of Block of assets, then whatever may be your cost,for the purpose of Dep. as per IT. the sales value is to be deducted and u will get the depreciation on the Balance.
Concept of Balance charge is applicable in case of the undertaking engaged in the business of generation or generation and distribution of power.
Where the assessee opts for charging depreciation on the basis of WDV, then the sale price shall be deducted from the total value of Block of Assets as usual.
In case, the assessee follos the SLM: If the Building , Machinery etc. is sold, discarded i the Previous year(other than the first yer of putting in to use), then the amt realised that falls short of WDV , then it shall be charged as terminal depreciation.
On the otherhand, if the sale price is higher over the WDV then, the excess of sale price over the WV to the extent of the Difference between the actual cost and WDV shall be chargeable to Income Tax as balancing charge u/s 41(2).
Where the sale price of the asset sold exceeds the cost of acquisition of such asset, such excess shall be treated as apital gain.. The capital gain may be LTCG or STCG.
Concept of Balance charge is applicable in case of the undertaking engaged in the business of generation or generation and distribution of power.
Where the assessee opts for charging depreciation on the basis of WDV, then the sale price shall be deducted from the total value of Block of Assets as usual.
In case, the assessee follos the SLM: If the Building , Machinery etc. is sold, discarded i the Previous year(other than the first yer of putting in to use), then the amt realised that falls short of WDV , then it shall be charged as terminal depreciation.
On the otherhand, if the sale price is higher over the WDV then, the excess of sale price over the WV to the extent of the Difference between the actual cost and WDV shall be chargeable to Income Tax as balancing charge u/s 41(2).
Where the sale price of the asset sold exceeds the cost of acquisition of such asset, such excess shall be treated as apital gain.. The capital gain may be LTCG or STCG.
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