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Depreciation Allowance

Anubhaw Garg (Chartered Accountant in Practice) (101 Points)

11 July 2016

A Pvt. Ltd. Company has no production in F.Y. 2015-16.
And Assets are subject to charge depreciation.
Is depreciation can be claimed?
It has neither turnover nor any purchase?

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2 Replies

(Guest)

Yes, depreciation deduction is mandatory. It is allowed, even if the assessee doesn't claim it.

mohammad rasool baig (Management Consultant) (1026 Points)
Replied 15 July 2016

As per section 32 of Income Tax Act, 1961, a assessee is entitled to claim depreciation on fixed assets only if the following conditions are satisfied:

1. Assessee must be owner of the asset – registered owner need not be necessary.

2. The asset must be used for the purposes of business or profession.

3. The asset must be used during the previous year.

The use of the asset during the previous year may be active use or passive [ie., kept ready for use].