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Please Help: profit or loss on sale of fixed assets

Posted Date : 22-Dec-2011 , 08:36:40 pm | Posted By: Naresh777

Category : Income Tax | Answers : 2| Comments : 3| Hits: 12396

what is treatment as per income tax act, if company earns profit or loss on sale of fixed assets and the same is charged to profit and loss account by comapny.

   Answer by: Ashish Karundia
Dear Rishab, You cab make a request for becoming an expert by clicking on the 'Become an Expert' tab.Your request will be considered CASANSAAR Team and accordingly you can become an expert. Thereafter, a link i.e. click here for answer will appear and by clicking on that link you can answer the query instead of posting the comments. Hope the above suffice.
   Answer by: CA VIPIN GARG
Dear Naresh, Profit or loss on sale of fixed assets under income tax act will be booked only if the whole assets of the block are sold or the value of block gets negative. otherwise it will just be deducted from the block of Assets. If you have charged the same in the company's books then while calculating the income as per income tax act, you have reverse the effect of the same. Hope you got the answer, you were looking for, have a nice day..........
Posted By : Naresh777 24-Dec-2011, 05:51:38
thanks you sir
Posted By : CA Vinod Kumar 23-Dec-2011, 12:21:14
Dear Naresh, The Porfit & loss on sale of fixed assets shall be adjusted in the block of assets. If the company has occurred profit then it will reduce the amount of depreciation and vice e verse.
Posted By : Rishabh Upadhyay 22-Dec-2011, 10:21:30
Hi Naresh, There are 2 points in your query,Firstly Charging of profits on sale of fixed asset to P& L Account and secondly Treatment of Profit/Loss on sale of asset. As for First, As per Income Tax Act, Profit/Loss on sale of Fixed asset can not be charged to P&L Account. So if the company has done that, same will be reversed while calculating Income under the head "Business & Profession" Secondly, Profit/Loss on sale of Fixed Assets will be subject to capital Gains, keeping in mind the provisions of Depreciation/Non Depreciation and also Short term/Long Term assets. Hope that solve your query. PS: also, will anybody tell me how to post these as "Answer" and not as "Comments" like i am doing right now. Thanks

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