60% to 40% change in depreciation - for existing capital, continue with old rate or new one?

Hello,

From current AY, the depreciation slabs have been changed and 40% is the maximum allowed now. 

Previously till last year, we had computers at 60%. Suppose  a new computer purchased last year and accounted at 60% in last years ITR, for the current year, will it continue at 60% or get reduced to 40%? 

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Also, is the provision for 100% depreciation allowance under section 32 for any capital purchase below Rs 5000 done away with now? 

I cannot find that section in the act anymore. 

So we should account capital purchases below Rs 5000 in the slabs as well? 

 

Kindly clarify the same

 

Thank you. 

 

 

Replies (1)

For your query related to depreciation rate of 40%

Yes from current year onwards you have to charge 40% depreciation on opening WDV irrespective last year being 60%. Also you wont get any option of 60% in ITR Forms.

 

For your query related to capitalising assets below 5000,

If you are of opinion that benefits of asset being purchased will continue for more number of years and not just for 1 year, then you should capitalise the same. However if benefits of same are just for 1 year, you can expense it out as revenue expenditure.

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