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Fixed Assets Disposal.....

Dharmender kumar Jha (Accountant) (208 Points)

16 December 2021

Hi experts,

I need your suggestions for disposal of fixed assets.

Company 'A' owned a car from 2014 & after depreciating the assets till date the value of car was Rs 230000approx as on 31.03.21. Now In September 2021 that car sold at the price of 345000/-.

pls help in to dispose off the car.

How to book entries...?
What will be the impact on books of accounts ..?
How to prepare Fixed assets register ..?
And How to treat this in income tax purpose...?

Thanks

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5 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14540 Points)
Replied 16 December 2021

1)Have you taken CENVAT credit in 2014 , when purchased car in 2014 ?.
2) Are you registered under GST ?.

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Dharmender kumar Jha (Accountant) (208 Points)
Replied 16 December 2021

Not taken cenvat credit
yes registered in gst

prasad Nilugal ( GST Practitioner & Accounts ) (14540 Points)
Replied 16 December 2021

1) since the car is for business purpose GST will applicable on margin on sale of an old car as per as per notification 8/2018 dated 25-1-2018 ( please refer), prepare Tax invoice .

2) Capital gain Tax may be applicable because car was used for business purpose just confirm .

3) You have deduct (sale) fixed asset from Gross block .Deprecation up to September may applicable .

4) please refer IND AS 105 sale of non current asset

Entries in the books of accounts

1) Sale booking entry as per Tax invoice

Trade Debtors A/c Dr

To Asset A/c Cr

To CGST A/c Cr

To SGST A/c Cr

( Booking of sales of an asset )

When you received payment

Bank A/c Dr