Depreciation

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This discussion explores whether a sole proprietor experiencing losses can choose not to claim depreciation on assets to reduce their taxable loss for FY 19-20. The consensus is that depreciation, representing asset wear and tear, is a mandatory allowance under income tax law and cannot be selectively avoided. Even if not claimed, the Written Down Value (WDV) of assets automatically reduces over time.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)
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07 January 2021 Sole proprietary concern is having losses for f y 19-20

Can we not claim depreciation on assets so that loss will be lesser to that extent

Is it allowed under income tax act ?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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07 January 2021 Depreciation is wear and tear , efflux of time you need provision to replace new asset after life time of Asset you cannot avoid to claim depreciation as and when you require