Become a Govt. Certified GST Practitioner in just 60 hrs. Register Now!

Taxablity of fixed assets

tushar (Chartered Accountant) (32 Points)

17 September 2014

I have sold a fixed assets for Rs 4 Lac for which i have earned a profit of Rs 40000 as per Companies Act, but in income tax i have a opening wdv of around Rs 40 lac so there was no cease of block so no capital gains tax. In computing income from PGBP i have deducted the amount from profit as per books.

Whether the profit as per companies act can be taxed in other sources.

Please help

Thanks in advance

Reply
Follow
Share

2 Replies

Mayuri Shelar-Private Tuition (Myself Provides Private Tuition for CS CA Mcom Bcom BBi BMS students ) (40 Points)
Replied 17 October 2014

Taxation will arise as per the income tax act..there are accounts which needs to be maintained as per the companies act ....Capital Gains calculation will be done as per the income tax act ...in the books profit as per companies act will be shown...

Upgrade to CAclubindia Pro. Subscribe Now!

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 17 October 2014

Entire sale proceeds need to be deducted from w.d.v of respective block and you need not to compute capital gain on it. So if you have Net profit of Rs.1,00,000(After including Profit on sale of assets of Rs.40,000), while computing Income from PGBP you need to offer Rs.60,000 only as business Income and you need not to offer 40,000 as capital gain. The reason being as you deduct sale proceeds of asset from W.D.V, you will get less depreciation to that extent and you are paying extra tax on it. If you again offer such 40000 as capital gain, it amounts to Double taxation.