Depreciation on sold asset

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Querist : Anonymous

Querist : Anonymous (Querist)

03 February 2016 Dear sir.
plz guide me.. A asset has been sold on 30/3/2016, plz let me know can we charge 15% dep. on this asset or not..

Regard
Sumit Shah

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

03 February 2016 1. Income Tax Act - As per Income Tax Act, depreciation is charged on the closing WDV. Closing WDV is calculated as follows:
Opening WDV+Additions during the year-Sales/disposal during the year.
Since the asset has been sold during the year it shall be reduced from the WDV. Accordingly depreciation is NOT admissible on such asset for the FULL year. For claiming depreciation the asset should be in possession on the closing hours of the last day of the year.

2. Companies Act - As per Companies Act, depreciation is allowed for the number of days for which the asset has been used. So you can claim depreciation for 365 days (2016 being a leap year).

Querist : Anonymous

Querist : Anonymous (Querist)

03 February 2016 sir consider my case the wdv of the asset was 126456 on 1/4/2015 however the same asset is sold of Rs. 100000 on 26455 30/3/2016 the loss is 26456 and this loss is also not deductable.. plz clarify can we charge dep. on 100000 or on 126456..

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