Depreciation as per Income Tax Rules

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This query is : Resolved

CA Dron Bharadwaj (Querist)

20 August 2009 op. bal. of building 100000

before 30 sep :
sale 1000
purchase 2000

after 30 sep :
sale 3000
purchase 4000

whether depreciation will be charged on sale of 3000(after 30 sep) at 7.5% ?

plz also provide legal base of the answer !!

Ravish

Ravish (Expert)

20 August 2009 No depreciation will be charged for the year as income tax prescribes the rate of 7.5% for assets purchased & used for 180 days or less & not on the sale of asset. In this case Rs 3000 will be deducted from the gross block of assets....Hope u r satisfied.

CA Binal Shah

CA Binal Shah (Expert)

21 August 2009 Hi,

Calculation wil be as under:

Op. Bal. 1,00,000
Add: Pur. 2,000 (before 30/09)
Pur. 4,000 (after 30/09)
Less: sale 4,000
Cl.Bal. 1,02,000

Unless & Until assets sold are out of new purchased,it is always assumed that assets sold are out of old assets.

In ur case, Cl.Bal. of 1,02,000/- consist of 2000 of new pur before 30/09,new pur after 30/09 & 96000/- from op bal.

So depn wil be charged @ 15% on 96000/- & 2000/- & @ 7.5% on 4000/-.

Hope u r cleared now.

CA Dron Bharadwaj

CA Dron Bharadwaj (Querist)

21 August 2009 thank u very much !!!!

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