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Depreciation on sale

praveen (Chartered Accountant) (6971 Points)

03 February 2009

On sale of an asset in a block then can we claim depreciation on sale

pleaase tell me as per companies act and income tax act and AS

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(Guest)

in block concept depreciation is provided as fololows

opening w.d.v xx

add: purchase xx

less: sale proceeds(*) xx

closing w.d.v xx

*sale proceeds is amount of sale and not the w.d.v of asset sold.

since deprecition is not charged on the sale amount........

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CA Parvin Ahuja (Chartered Accountant) (408 Points)
Replied 03 February 2009

No depriciation is allowed on any assets which has been sold. Depriciation is allowed if the asset is owned by the assessee on the last day of the previous year.

Abhinav Agarwal (M.Com C.A SAP Consultant) (814 Points)
Replied 03 February 2009

Parvin Ji I think this you are telling as per Income Tax Act.B'coz as per companies act, to the best of my knowledge we can claim dep proportionately even in the year of sale.

Ashish M (Chartered Accountant) (2731 Points)
Replied 04 February 2009

As per companies Act, depreciation upto the date of sale shall be calculated and deducted from the actual opening balance of that yr.......

As per Companies Act, Schedule XIV, Notes : Point no.4

"Where during any financial yr, any addition has been made to any asset, or where any asset has been sold, discarded, demolished or destroyed, the depreciation on such asset shall be calculated on a pro rata basis from the date of such addition or, as the case may be, up to the date on which such asset has been sold, discarded, demolished or destroyed."

Whereas as per Income tax act, no depreciation is given in the year in which the asset is sold...........

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