22 August 2024
I have a proprietorship firm engaged in exports of handicrafts. I had a car in the name of the firm with book value 3 lakhs. I sold it for 4 lakhs (1 lakh profit) . After 4 days I purchased a new car for 10 lakhs. How do I account for it ? After claiming depreciation till date of sale , do I show profit on sale of fixed asset (old car) ? Or do I just make an entry for sale of old car and a new entry for purchase of new car in my books in which case I won't have to show profits ? Thanks for clarifying.
22 August 2024
As you purchased it after the sale of old car, you need to declare the profit of Rs. 1 lakh as STCG. The new car can be posted under new block of assets.
22 August 2024
Thank you sir. This is for income tax . Can you help me with the accounting. How do I show it in my books ? This is not my business profit . So where and how do I show this profit in my books ? Thanks
CAclubindia
