Deprecation during pre-construction
This query is : Resolved
Sanchit Jain
(Querist)
17 August 2010
A new company is being incorporated for setting up a power project. The company apart from land and other civil work which are shown as CWIP also purchases certain assets like computer, furniture, etc. on which depreciation is provided under Companies Act and capitalsed as pre-operative expenditure pending allocation.
Should we claim depreciation under Income Tax Act also as the assets (computer, etc.) have been put to use or should we wait till the commencement of project?
Should we claim depreciation under Income Tax Act also as the assets (computer, etc.) have been put to use or should we wait till the commencement of project?
Aditya Maheshwari
(Expert)
17 August 2010
If the assets are being put to use then depreciation as per Income Tax allowable otherwise not.
Also i think the WDV as per I. T. Act will be the carrying value of asset for Income tax purpose and future depreciation.
Also i think the WDV as per I. T. Act will be the carrying value of asset for Income tax purpose and future depreciation.
Sanchit Jain
(Querist)
17 August 2010
Thnx for the reply..
So we should claim depreciation and carry forward the depreciation loss..
So we should claim depreciation and carry forward the depreciation loss..
Aditya Maheshwari
(Expert)
17 August 2010
yes if assets put to use.
17 August 2010
YOU SHOULD CLAIM DEPRECIATION ON ASSET AS PER IT ACT AND MAKE DEFFERED TAX ASSET AGAISNT IT.
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