Assesse constructed a building for residential purposes in the year 2004 Cost of Land - Rs. 2.5 lacs (Purchased 10 years earlier) Cost of Construction of Building - Rs. 24 lacs Assesse started business in the year of 2014 Assessee started using that residential property for the purposes for business. He used that residential property as an office.
Queries -
How to claim depreciation on same? Should the depreciation be claimed from year AY 15-16 or from the year of construction? At what rate should depreciation be claimed? Depreciation should be claimed on whole property or proportionately on only the part used for business? Depreciation should be claimed on the composite COST of Land & Building (i.e on Rs. 2650000)?
23 March 2017
Depreciation should b calculated on the part of the building which is used for business purpose only. Depreciation should b deducted from the period since the building is used for business purpose. The rate of depreciation depends on the nature of assessee accordingly, as per income tax act the rate is 10%.
23 March 2017
Nature means type of assessee, of Company then Companies Act 2013, Depreciation will b followed. You must follow Income tax rates for IT returns irrespective of nature of the assessee. No 5% is for Residential Building(complex etc), but as it is used for business hence, it should be 10%.
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