Suppose computer has purchased on 01.04.2010 of1000. and same has sold on 30.4.2010 for900 and company has charged depreciation on wdv as per companies act.
Transaction as per Companies ACT
FA - DR - 1000 TO BANK- 1000
DEPRECIATION - DR- 33.33 (1000*40%/12MONTH) TO FA- 33.33
BANK - DR- 900 LOSS ON SOLD OF FA- DR 66.67 TO FA- 966.67
Note;- As per companies act depreciation is calculated on day basis.
Treatment as per Income Tax Act.
Depreciation is calculated on closing wdv of block of assets.
Suppose Opening wdv is10000 Purchase 01.04.2010-1000 sold 30.04.2010 -900
Deprecation to be calculated on10100 @ 60%
And is there is no opening Wdv then short term capital gain would be100 and depreciation amt would be nil as per income tax act
18 May 2011
navin sir, first of all thank u for reply but another issue is involved here which i didnt mention is that the purchaser company has tranferred the assets to a sister concern. now the invoices of assets are in the name of original purchaser and then transferred then can it claim dep as per income tax. plz provide me with particular provision also thank u so much again have a nice time
CAclubindia
