Depreciation in case of succession due to death

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Prashant Nayak (Querist)
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25 July 2014 Sir, Proprietor died in October, his son took over the business from November. Will depreciation be divided proportionately on the basis of NO. OF DAYS USED or Proprietor will not get any depreciation and his son will get half year depreciation only.

Prashant Nayak

Prashant Nayak (Querist)
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25 July 2014 In my opinion succession due to death is as good as sale due to which all assets will be treated as sold to his son in November. Hence proprietor will not get any depreciation and son will get only half year depreciation.

Prashant Nayak

Prashant Nayak (Querist)
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26 July 2014 Koi Expert nahi bacha kya CA Club India mein...

Aashok Kumar Sharma online

Aashok Kumar Sharma online

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21 July 2024 In the case of succession due to death of a proprietor, the treatment of depreciation typically follows certain principles under tax laws and accounting standards:

1. **Depreciation up to the Date of Death:**
- Depreciation is allowed to the proprietor's estate up to the date of death. This means that depreciation can be claimed for the period the assets were used by the deceased proprietor in the financial year.

2. **Depreciation from Date of Succession:**
- From the date of succession (in this case, when the son takes over the business from November), the successor (son) can claim depreciation for the remaining part of the financial year.

### Practical Application:

- **Proprietor's Depreciation:** The proprietor (deceased) can claim depreciation for the assets used up until his date of death in October. This depreciation is calculated based on the number of days the assets were used during that financial year.

- **Successor's Depreciation:** The successor (son) can claim depreciation for the assets from the date he took over the business in November until the end of the financial year. This depreciation would be calculated based on the number of days from November onwards.

### Example Calculation:

Let's assume:
- Annual depreciation for an asset is Rs. 12,000.
- Date of death of the proprietor: October 15.
- Date son takes over business: November 1.

- Depreciation for the proprietor: Rs. 12,000 x (15/365) = Rs. 493.15 (rounded off).
- Depreciation for the son: Rs. 12,000 x (30/365) = Rs. 986.30 (rounded off).

### Conclusion:

In summary, depreciation is apportioned based on the actual period of use by the proprietor and the successor during the financial year. The estate of the deceased proprietor can claim depreciation up to the date of death, and the successor can claim depreciation from the date of succession onwards. This ensures that both periods are accounted for appropriately and in compliance with tax and accounting principles.

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