Depreciation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2012 A propreitorship converted into partnership in the middle of the year. How the fixed assets and depreciation to be calculated for tax purposes?

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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21 September 2012 At which cost the assets transferred is the cost of purchases to the partnership firm and on this value the depreciation has to charge according to the income tax rates. If such transfer taken place on or after 2nd October then half of the depreciation has to claim for the first year.

The same value is the sale consideration to the propreitorship so based on these values and WDV of the assets in the propreitorship calculate short-term capital gain/loss and no depreciation will be allowed to the propreitorship for the transferred year.

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