Profit on sale of Fixed Asset but not resulting STCG or STCL

[Suresh P]

Dear Experts,

There is a sale of Fixed Asset generating a Profit (Say ₹ 100). But the same block of asset during the year does not cease to exist under IT and the block of asset as at the beginning(Say ₹ 200) as reduced by the sale consideration received on sale of such asset (₹ 100) is a positive(₹ 200-₹ 100).There is no acquisition in the relevant block during the previous year.

Obviously we have to reduce the profit on sale of Asset (₹ 100) while computing business income and the same has to be reduced from the block of asset and the depreciation for the balance has to be computed. There will be no capital loss as the block of asset does not ceases to exist and nor does the capital gain as the sale consideration (₹ 100) is not more than the WDV(₹ 200).

Please explain how to deal with the same in winman software if someone of you use it or IT Filing website.

Thanks in Advance.

AI Summary

Block of assets treatment: sale proceeds reduce block WDV and profit adjusts business income, not treated as capital gain. When a fixed asset within a depreciation block is sold but the block does not cease to exist and sale consideration does not exceed the block's written down value, the sale proceeds reduce the block's opening WDV and depreciation is computed on the net balance. The profit on sale is adjusted in computing business income and is not treated as a short-term capital gain or loss where the block remains and consideration is not more than the WDV.