My query is one of asset in block of assets is sold on 10-8-2017 ( sold value 3,70,000) ..opening wdv of that block is 48,14,273..now what amount should i reduce for sold price ? how to calculate deprecation. As per IT Act
Depreciation = Rate of Depreciation * (Rs.48,14,273 --- 3,70,000)
Aggregate of WDV of all the assets falling within
that block at the beginning of the year
Add: Actual cost of any assets falling within block
acquired during the previous year
Less: Money received or receivable in respect of any
asset in the block which is sold, discarded, demolished
or destroyed during the previous year
= WDV at the end of the year
Less: Depreciation at block rate (if WDV at the end of year is positive)
Closing value of the block of the asset at the end of the year
If the amount of WDV comes at a negative amount then no depreciation is allowed and the amount will be considered as capital gain and the closing WDV will be zero.
If such amount is positive and no asset exists in the block then such amount will be treated as short term capital loss and no depreciation is alllowed.