Depreciation


This query is : Resolved 

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16 August 2013 Discount given by Seller has been deducted from Fixed Asset in Books of Accounts and Depreciation calculated accordingly.

Now for Income Tax purpose will it be deducted from Gross Block?

16 August 2013 The amount AFTER discount will be capitalised in the books and the same amount shall be used for calculating depreciation as per Income Tax Act.

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16 August 2013 Gross Block as per books is existing and it is subsequent credit given by seller that is deducted from Assets in Books of Accounts..

Now should i also deducted it from Block for Income Tax purpose.

16 August 2013 What is nature of Discount?

Is the discount on account of early payment?
or it relates the Assets directly?

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17 August 2013 It relates to Asset directly , So deducted as per AS 6, Now what to do for income tax purpose?

19 August 2013 depreciation is to be charged on cost of assets (less discount) and other exp. incurred for the assets till put to use

20 August 2013 Yes, I agree with CA Unesh Dulal.
You need to deduct the amount of discount for the purpose of calculating depriciation.


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