Depreciation on leasehold premises ?
This query is : Resolved
CMA. Subhash Kumar Jha
(Querist)
26 May 2009
We are a pvt ltd co. & run in a leasehold premises. Its a lease for 2 years.
We have made wooden cabins / workstations / electrical fittings in this premises.
All of these cost around 16 lacs Rupees. The premises was put to use during May, 2008.
What should be treatment of Depreciation in income tax Act & In companies act.
Thanks
Subhash
We have made wooden cabins / workstations / electrical fittings in this premises.
All of these cost around 16 lacs Rupees. The premises was put to use during May, 2008.
What should be treatment of Depreciation in income tax Act & In companies act.
Thanks
Subhash
Vipul J. Bhavsar
(Expert)
26 May 2009
Assuming that the company wants to stay in the business for a long period. i.e. more than one year, the company should capitalise the assets that have been installed in the leasehold premises. Wooden Cabins/electrical fittings should be treated as Furniture and Fittings. Workstations as Computers etc.
Accordingly depreciation should be claimed from May 2008
Accordingly depreciation should be claimed from May 2008
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