BMC Associates says Replied on 6th June,2026 12:46 PM

Salvage value is generally considered after tax while evaluating investment decisions because the sale of an asset may result in a taxable gain or an allowable loss. The actual cash inflow received by the business is therefore the sale proceeds adjusted for the tax impact arising from the difference between the asset's book value and its selling price. Since capital budgeting decisions are based on real cash flows available to the business, the after-tax salvage value provides a more accurate measure of the net benefit from disposing of the asset. Ignoring tax effects could overstate or understate the actual cash inflow from the sale. For businesses evaluating capital investments and tax implications, a chartered accountant Gurgaon professional can help determine the correct after-tax salvage value and improve financial decision-making.