Depreciation on asset after sold

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For companies (Pvt Ltd, Ltd), depreciation on an asset sold during the financial year is calculated pro-rata based on the period it was owned. This means if an asset is sold in October or November, you can claim depreciation for only those six months. However, for sole proprietorships or firms, depreciation is typically claimed for the full financial year, even if the asset is sold mid-year, as per income tax provisions.

dilip

dilip (Querist)
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02 February 2024 Dear Sir,

can we take 6 months depreciation, when asset sold in oct/November-23?

RAJA P M

RAJA P M (Expert)
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02 February 2024 If it's not a ltd or pvt Ltd then Depreciation required full year.

Aashok Kumar Sharma online

Aashok Kumar Sharma

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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.

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