17 December 2015
A person started a business in FY 2010-11.Till FY 13-14 his total income was below basic exemption limit.But in FY 14-15 his income was above limit.Assuming he has no other income then u/s 32 what would be his opening wdv? Will it be dep provided in books or opening wdv in FY 10-11 minus dep as per IT ACT with rates relevant at those times?
18 December 2015
It is advisable to calculate WDV as per act by calculating depreciation for earlier years and then considering the WDV as opening balance for the purpose of calculating depreciation for current year.
18 December 2015
Dear Ameya it is opted in practice to deduct depreciation for the period even if income falls below the taxable limit. So you should deduct depreciation. adnd value net of depn will be the opening value.
19 December 2015
AS PER SEC 32, DEPRECIATION IS COMPULSORY DEDUCTION, NOT OPTIONAL, AS OF NOW. THUS YOU WILL HAVE TO CALCULATE DEPRECIATION FOR EARLIER YEARS, DEDUCT THAT FROM COST FOR CALCULATING OPENING WDV.
CAclubindia
