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Depreciation under income tax act 1961

CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)

08 January 2018

Dear Experts and Friends,

A Company purchased a Machinery in FY 2016-17 but put to use in Dec-2017 (i.e. FY 2017-18).

Now For FY 2017-18 - How much Depreciation will be allowed under IT Act 1961 - 50% or 100% ?

(Assumption - Only that Machinery comprises the Block)

Kindly suggest.

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8 Replies

Rishi Mehta (Ur friend ) (1533 Points)
Replied 08 January 2018

100% Depreciation will be allowed in FY 2017-18.

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Rakesh Bandal (Self Employed and Agriculture) (1349 Points)
Replied 08 January 2018

In my openion only 50% (F.Y 2017-18) of total depreciation will be allowed and balance 50% (F.Y. 2018-19) will be allowed in next year

as prerequisite for claiming depreciation is asset should be put to use if claiming for first time

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CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)
Replied 08 January 2018

Originally posted by : Rishi Mehta
	100% Depreciation will be allowed in FY 2017-18.

Dear Rishi Ji,

Will u please elaborate?

CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)
Replied 08 January 2018

Originally posted by : Rakesh Bandal
	In my openion only 50% (F.Y 2017-18) of total depreciation will be allowed and balance 50% (F.Y. 2018-19) will be allowed in next year as prerequisite for claiming depreciation is asset should be put to use if claiming for first time

Dear Rakesh ji,

I am also of the same view.

Rishi Mehta (Ur friend ) (1533 Points)
Replied 08 January 2018

50% Depreciation is allowed only if the Year of acquisition and installation of Machinery is the same.
100% of normal Depreciation will be allowed if year of acquisition and installation is different.

In your case year of acquisition is 2016-17 and year of installation of Machinery is 2017-18. Therefore, 100% of Depreciation will be allowed.

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Rishi Mehta (Ur friend ) (1533 Points)
Replied 08 January 2018

Reason of restriction of 50% of normal Depreciation: If asset is put to use for less than 180 days in the year of acquisition.

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Rishi Mehta (Ur friend ) (1533 Points)
Replied 08 January 2018

In your case condition of put to use of 180 dasy will not be applicable, since year of acquisition and year of put to use is different.

Anurag lohiya (Bara bazar) (262 Points)
Replied 08 January 2018

Mr. Bijay Shrestha,
Facts of your case:
1. Year of acquisition and year of put to use is difgerent in your case.
Answer to your query:
1. Depreciation u/s 32(1)(ii) is allowed @ 15% (assumed) Fully.
Reason: Proviso to section 32(1)(ii) is applicable in the year of acquisition only. Since in your case year of put to use and year of acquisition is not the same, depreciation shall be allowed fully.

Note: Same provison shall be applicable in case of additional depreciation u/s 32(1)(iia) (if applicable).

Hope this will meet your requirement.

Regards.

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