Depreciation

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mohan karandikar (Querist)
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22 June 2012 Dear sir/madam,

I sold a car in July 2011 for Rs. 400,000/- and a week later bought a new car for Rs. 800,000/- (invoice value).

On what value is depreciation to be claimed for AY 2012 - 2013 ?

Thanks & regards.
Mohan.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 June 2012 1. As per Income Tax Act, depreciation will be calculated only on Rs. 8 lakhs.

2. As per Companies Act, depreciation will be calculated on both Rs. 4 lakh and Rs 8 lakh on the basis of the number of days for which the asset was used.

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mohan karandikar

mohan karandikar (Querist)
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22 June 2012 I am filing returns as an individual.

Won,t the written-down-value be Rs. 400,000/- ( Rs. 800,000/- minus Rs. 400,000/-), for calculation of depreciation?

Thanks & regards.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 June 2012 WDV will be calculated as under:

Opening WDV Rs. 4lakhs
Add: Additions Rs. 8 lakh
Less: Sale Rs. 4 lakh
Balance Rs. 8 lakh

If the opening WDV was less than Rs. 4 lakhs, then calculation shall be made accordingly.

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mohan karandikar

mohan karandikar (Querist)
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22 June 2012 Thank you very much Mr. Bhardwaj for your answer and further clarification.

with best regards,
Mohan K.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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23 June 2012 You are welcome. You should use the thanks button to convey your thanks.

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