The system automatically calculates any gains of losses on sales of assets according to the Income Tax Act. Any gains or losses have to be taxed.

If you sell an individual asset from a block, the value of the asset block goes down by the sale price. For example, assume that you have an asset block of trucks. On 1 April 20X2, the trucks’ total net book value is INR 270,000. On 1 February 20X3 you sell one of the trucks for INR 50,000. At the end of the year, the net book value before depreciation is therefore INR 220,000.

If the sale of an asset causes the value of the asset block to fall below zero, the amount below zero constitutes a capital gain under the terms of the Income Tax Act. For example, on 1 April 20X3 the trucks’ total net book value is INR 198,000. On 1 December you sell a truck for INR 210,000. On 31 March 20X4 the system determines the asset block’s net book value as:

This makes a capital gain of INR 12,000, which the system stores in a table for your future reference.

The following year, the net book value of the asset block is set to zero.

If you sell all the assets in a block, but the block still has a net book value, the system posts this value as a capital loss. For example, if you have a block with only one asset valued at INR 12,000, and you sell it for INR 10,000, the net book value of the block is still INR 2,000, even though there are no assets in it.

The system stores the capital loss amount in a table for your future reference.