depreciation

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CA Saba Naaz (Querist)
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14 September 2010 There are 2 machines whose WDV as on 1-4-2009 is 600000. New machine is acquired on 15-11-2009 & put to use on same date. This new machine is sold on 25-3-2010.
What will be the rate of depreciation?(Full or half & why)

CA SMR

CA SMR (Expert)
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15 September 2010 Rate of Depreciation as per IT Act is 15%.Half of the rate will be applicable in case of the new plant,as it was installed after 6 months got over in the FY 2009-10.

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Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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15 September 2010 Whenever any asset is purchased it is added in the respective block of the asset and whenever there is any disposal of asset it is reduced from the block of the asset. Depreciation under section 32 of income tax act is allowed on the WDV as on last date of the respective previous year. The meaning of WDV has been defined under section 43(6). When any asset which is included in the block of assets on the last date of previous year and put to use for less than 180 days then depreciation is allowed at the rate of 50%.

In the above case as the asset was sold before march 31 then it shall not be included in the block as at march 31. Hence depreciation shall also not be allowed in such case.

However fluctuation arised due to purchase and sale of machinery will affect the depreciation accordingly.

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