Depreciation on asset after sold
This query is : Resolved
02 February 2024
Dear Sir,
can we take 6 months depreciation, when asset sold in oct/November-23?
can we take 6 months depreciation, when asset sold in oct/November-23?
02 February 2024
If it's not a ltd or pvt Ltd then Depreciation required full year.
13 August 2025
For Companies (Pvt Ltd, Ltd)
As per Companies Act & Income Tax Act, depreciation is allowed pro-rata for the period asset was owned during the year.
So if asset is sold in Oct/Nov (say after 6 months), you can claim depreciation only for those 6 months in that financial year.
For Proprietorship/Firms (Non-company)
Generally, depreciation is claimed for the full financial year, even if the asset is sold during the year.
This is because depreciation in these entities follows income tax provisions which allow full year depreciation unless asset is sold before the year starts or at the start of the year.
As per Companies Act & Income Tax Act, depreciation is allowed pro-rata for the period asset was owned during the year.
So if asset is sold in Oct/Nov (say after 6 months), you can claim depreciation only for those 6 months in that financial year.
For Proprietorship/Firms (Non-company)
Generally, depreciation is claimed for the full financial year, even if the asset is sold during the year.
This is because depreciation in these entities follows income tax provisions which allow full year depreciation unless asset is sold before the year starts or at the start of the year.
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