depreciation treatment of asset valued less than Rs.5000

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Sachin Kataria (Querist)
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16 July 2008 Hi all
please tell me the treatment of assets of Rs.5000 or less under company law for following:

1) Do we need to apply this concept on initial Build out capital expense for a new site?

2) Suppose we have bought 1000 chairs of Rs.4800 each for setting up a new site, do we need to expense it off in a single year.
i have a similar query for the bulk purchase of Headsets and telecom equipments individually costing less than Rs.5000 purchased for setting up a new site?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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16 July 2008 All items of fixed assets which in itself is a complete unit and functins independently and whose costing is upto Rs 5000 may be depreciated @ 100%. It does not make any difference whether the same has been acquired in a bulk purchase or not.

Sachin Kataria

Sachin Kataria (Querist)
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16 July 2008 please give the clarification of Ques 1 and tell me whether 100% rate is mandatory for independent items

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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16 July 2008 In case of purchase of any fixed asset costing upto Rs 5000/-, at new site where it does not form a part of other machinery or asset and functions as an independent asset, the same may be depreciated @ 100%.

Sachin Kataria

Sachin Kataria (Querist)
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16 July 2008 Is 100% rate is mandatory or can we charge at lower rate( Normal rates)

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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17 July 2008 in my opinion, considering aggregate value of ur purchase, u shud not write them off with 100% dep. u shud carry them like simple furniture and apply regular rate, which i think is 18.1%

Sachin Kataria

Sachin Kataria (Querist)
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17 July 2008 more suggestions are welcomed