Asset wdv is below 100

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 October 2016 Dear All
Asset WDV is 41 as on 1/4/2015
pls clarify can i charge full depreciation
Of 41 in AY 2016-17 i.e.

Dep. A/c DR...41
To asset...41

Pls clarify,
Thanks
Rajkumar

Expert : Anonymous

Expert : Anonymous (Expert)

18 October 2016 Dear Rajkumar, what purpose will it serve to write off Asset having so low balance. instead club it in asset block with same rate of depreciation.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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14 July 2024 In the scenario you've described, where the Written Down Value (WDV) of the asset is 41 as on 1st April 2015, and assuming you are calculating depreciation under the Income Tax Act in India, here's how you should proceed:

### Depreciation Calculation

1. **WDV Below 100**:
- If the WDV of an asset is below 100 as on the first day of the previous year (i.e., 1st April 2015 in this case), then as per the Income Tax Act, you are eligible to claim depreciation at the rate applicable to the asset for the entire amount of WDV in the assessment year.

2. **Depreciation Calculation for AY 2016-17**:
- Assuming the asset qualifies for depreciation and is not specifically excluded under any provisions of the Income Tax Act, you can charge depreciation at the rate applicable to the asset on the entire WDV of 41 during the Assessment Year (AY) 2016-17.
- For example, if the asset is eligible for depreciation at 10%, then the depreciation calculation would be:
- Depreciation Expense = WDV * Rate of Depreciation
- Depreciation Expense = 41 * 10% = 4.1 (in lakhs)

3. **Journal Entry**:
- The journal entry to record depreciation for the year 2016-17 would be:
```
Depreciation A/c Dr. 41
To Asset A/c 41
```
This entry records the depreciation expense in the Depreciation Account and reduces the value of the asset in the Asset Account.

### Conclusion

Yes, based on the information provided, you can charge full depreciation of 41 during the Assessment Year 2016-17, as the WDV of the asset is below 100. Ensure that you comply with all relevant provisions of the Income Tax Act and maintain proper documentation to support your depreciation claim. If there are specific conditions or exclusions applicable to your asset, you should verify those before claiming depreciation.

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