Recording of fixed aaset

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Tina Jain (Querist)
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25 December 2017 If a plot is purchased and then construction is done on that, then how it will be recorded in books of accounts, whether plot amount will go in land and construction amount in building or both amounts will be recorded in house property head for income tax purpose

Z (Expert)
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26 December 2017 If the construction has not completed, then it can be shown as Capital Work In Progress. If construction is completed then it would be appropriate to segregate the land and building.
There is no depreciation on the land, depreciation is available only in respect of building and for this purpose, it is essential to identify both of them separately.

Tina Jain

Tina Jain (Querist)
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26 December 2017 if dont want to claim depreciation then?

Z (Expert)
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26 December 2017 As per Explanation 5 to Section 32, it is mandatory to claim the depreciation.

Tina Jain

Tina Jain (Querist)
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26 December 2017 but it is not used in business, that property is let out property

Z (Expert)
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26 December 2017 57. The income chargeable under the head "Income from other sources" shall be computed after making the following deductions, namely:—
(ii) in the case of income of the nature referred to in clauses (ii) and (iii) of sub-section (2) of section 56, deductions, so far as may be, in accordance with the provisions of sub-clause (ii) of clause (a) and clause (c) of section 30, section 31 and sub-sections (1) and (2) of section 32 and subject to the provisions of section 38 ;

Yet again, mandatory.

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