Wdv for purpose of depreciation
This query is : Resolved
02 May 2016
Mr A has Rs.1 crore worth block of assets in his business. 50 lakhs worth of assets got destroyed in fire accident. 10 lakhs is received as insurance claim. Now what is the WDV of the block- on what amount depreciation is to be calculated?? How to treat insurance claim of Rs.10 lakhs??
Please help me
Please help me
03 May 2016
Since the block of asset still exist, 10 lacs insurance claim received will be reduced from total block wdv of 1 crore and dep will be allowed on 90 lack wdv. As u mentioned wdv of stock destroyed is 50 lacs, so no capital gain / loss will arise in this case. Loss of 40 lacs will be allowed in tax by way of dep.
Thanks
Thanks
Message likes :
1 times
03 May 2016
Sir we should not reduce 50lakhs from the block?? On what amt depreciation is to be calculated?? Please help me
03 May 2016
And sir why cap gain issue arise in this case?? I am using these assets in my business and not as investment
03 May 2016
Dep will be charged on 90 lacs. If u would have received 110 lacs in case the whole block gets destroyed, implications of capital gain will be there. Other scenerios also there.
Message likes :
1 times
03 May 2016
Thank you sir. So loss of 40 lakhs is allowed as depreciation. Then can i show 10lakhs insurance claim as income in my P&L a/c??
03 May 2016
10 lacs will be reduced from 1 crore wdv to arrive at 90 lacs wdv for the purpose of tax. It will not be income for taxation purpose.
Accounting treatment will be done as usual.
Accounting treatment will be done as usual.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Deemed Capital Gain
- Exiting partner in partnership firm in gst portal
- Type of Capital Gain
- F & O PROFIT REPORTING FOR AY 2026-27
- LIABILITY ADJUSTMENT
- ITR-3 File/Error Found
- Due Date Clarity
- Accounting with Claude
- TDS _Long term Capital Gain ref.sec 214 Table 2
- VALUATION OF PRIVATE LIMITED COMPANY SHARES
- Gst on travel by air for business purposes
- Loss of interest in PF transfer from EPFO to Trust
- Seeking Advice: High Tax Shortfall on Job Switch + Let-Out House Property Loss in FY 2025-26
- TDS offline utility
- TDS on rent received on hardship compensation being rent on redevelopment of building
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
