ADDITIONAL DEPRECIATION U/S 32 OF INCOME TAX ACT 1961
This query is : Resolved
19 November 2009
IF THE INDUSTRIAL UNIT ESTABLISED AND IS ENGAGED IN MANUFACTURINGPROCESS SINCE 2005 AND HAS PURCHASED A NEW MANUFACTURING MACHINERY IN JAN 2009. WILL HE GET BENEFIT OF ADDITIONAL DEPRECIATION FOR FIRST YEAR IN A.Y. 2009-10. KINDLY HELP ON THIS ISSUE.
19 November 2009
Please note that for claiming additional dep, both acquisition & installation of machinery should take place in same F.Y. Further, Additional Dep. would be allowed to the extent of half of 20 % as the put to use is less than 180 days . Therefore, additioanl dep would be allowed only @ 10% of original cost of new machinery.
19 November 2009
well my question is the unit is manufacturing unit since 2005. it has purchased machinery in 2005 and is manufacturing the inventory. but after 4 years they purchased new machinery for production. would they be able to claim additional depreciation only on the new machinery purchased for first year only.
20 November 2009
Additional depreciation is allowable on the new machinery purchased and it is allowable in the first year only.
20 November 2009
Let's say machineries purchased and commercial production commenced on 10.08.2005. Lets Assume the value of P&M is Rs.10,00,000 purchased on 10.08.2005 and on 10.01.09 additional machinery purchased for Rs.5.00 Lacs and put to use on 15.01.09. The deprn.calculation for IT will be as follows.
FY 05-06 (AY 06-07)
Block: P&M: 10,00,000
Rate 15%
Depr: 1,50,000
WDV 8,50,000
FY 06-07 ( AY 07-08)
OB 8,50,000
Rate 15%
Deprn: 1,27,500
WDV 7,22,500
FY 07-08 ( AY 08-09)
OB 7,22,500
Rate 15%
Deprn: 1,08,375
WDV 6,14,125
FY 08-09 ( AY 09-10)
OB 6,14,125
Additions
Aftet 30.09. 5,00,000
Rate 15%
Deprection on OB 92,119
Deprection on Add.37,500 ( 5 Lac x 15%/2)
Additiona Deprn.20%:50,000 ( 5 Lac x 20%/2)
WDV ason 31.303.09 9,34,506
Note: Additional depreicaion is available only for New machinery and not for second hand machinery.
Hope the above is clear to you
FY 05-06 (AY 06-07)
Block: P&M: 10,00,000
Rate 15%
Depr: 1,50,000
WDV 8,50,000
FY 06-07 ( AY 07-08)
OB 8,50,000
Rate 15%
Deprn: 1,27,500
WDV 7,22,500
FY 07-08 ( AY 08-09)
OB 7,22,500
Rate 15%
Deprn: 1,08,375
WDV 6,14,125
FY 08-09 ( AY 09-10)
OB 6,14,125
Additions
Aftet 30.09. 5,00,000
Rate 15%
Deprection on OB 92,119
Deprection on Add.37,500 ( 5 Lac x 15%/2)
Additiona Deprn.20%:50,000 ( 5 Lac x 20%/2)
WDV ason 31.303.09 9,34,506
Note: Additional depreicaion is available only for New machinery and not for second hand machinery.
Hope the above is clear to you
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