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Depreciation (Income Tax)

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This query is : Resolved



( Author )
12 January 2008

A Partnership firm has been converted as pvt ltd company under chapter IX of the companies act, 1956 on 20th October 2007. How much depreciation will be allowed to partnership firm and company.

As per Income Tax Act Depreciation is not allowed in the year of disposal/transfer of assets. Since Partnership Firm has been converted during the financial year 2007 - 2008 weather depreciation will be allowed to firm or not.

As per Income Tax Act Depreciation to the Company should be allowed for half year as Company came into existiant only on 20.10.2007.

It appears that only half depreciation will be allowed for financial year 2007 - 2008. Is it not a disadvantage on conversion.

R. A. Joshi


shipra walia

( Expert )
14 January 2008

till the date of conversion the depreciation on the asets will be claimed by partnership firm on the rates applicable under Incoem Tax ACt and from the date of conversion the depreciation will be calculated as per the companies act format (gross Block)at the rates applicable under both comapnies ACt and Partnership Act. The value of Assets will be as stated in the acquisiton agreement or the agrred value for acquisition.


Ramawatar Joshi

( Author )
18 January 2008

A Partnership firm has been converted as pvt ltd company under chapter IX of the companies act, 1956 on 20th October 2007. How much depreciation will be allowed to partnership firm and company.

As per Income Tax Act Depreciation is not allowed in the year of disposal/transfer of assets. Since Partnership Firm has been converted during the financial year 2007 - 2008 weather depreciation will be allowed to firm or not.

As per Income Tax Act Depreciation to the Company should be allowed for half year as Company came into existiant only on 20.10.2007.

It appears that only half depreciation will be allowed for financial year 2007 - 2008. Is it not a disadvantage on conversion.

R. A. Joshi


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