Capitalization of asset if its value less than 5000 inr

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vivek naredi (Querist)
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02 February 2014 I would like to know that is there any law which says that an aseet could only be capitalised if its value is more than 5000.??

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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02 February 2014 Yes this is as per Schedule XIV of the Companies Act 1956.

It says:

Notwithstanding anything mentioned in this Schedule depreciation on assets, whose actual cost does not exceed five thousand rupees, shall be provided depreciation at the rate of hundred per cent.

Provided that where the aggregate actual cost of individual items of plant and machinery costing Rs 5,000/- or less constitutes more than 10 per cent of the total actual cost of plant and machinery, rates of depreciation applicable to such items shall be the rates as specified in Item II of the Schedule.

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