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Dep on Assets purchased during the year

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This query is : Resolved

varun gupta (Querist)

27 June 2009 As per Companies Act, for New Assets purchased during the year costing less than Rs 5000, dep shall be charged 100%. Now,
a) THis 100% means that Asset be fully depriciated during the year of purchase or dep shd be charged at 100% for the no of days Asset has been used?
b) If there is purchase of say 10 chairs each costing Rs 3500/- totalling Rs 35000/-. Out of them only 5 chairs have been put to use during the year. Now what & how should the dep be charged over this purchase transaction?

vinod kumar lalwani

vinod kumar lalwani (Expert)

28 June 2009 Dear

a) the intention of law is very clear as this cluse is provided in proviso of note no.8 of sch. no. xivth and the provision of dep. on the basis of no. of days is given in note no.4 of the same.later provisions have overriding effect on earlier so full dep. will be provided in the year of purchase itself.

b) each chair is separate useable and is a asset individually so we can writeoff the assets of all chaires in the year of purchase.

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