Accounting treatment for purchase on installment basis

if you purchased car in before 180 days from closing date of current year than u can claim depreciation fully otherwise you can claim 50% depreciation in current year. Vehicale a/c Dr to Bank Loan A/c bank loan a/c Dr (entry for Installment paid) to Bank a/c Cr Depreciation A/c Dr To Profit and loss a/c Important note : for example rate of depreciation is 10% if car is bought before 180 days from 31st march 2015 charge depreciation @ 10 rate and otherwise charge depreciation at 5%rate

You do not have to worry about the installments paid. If the car is purchased and shown as business asset just claim the half of the rate of depreciation as it is in business for less than 180 days.

You can claim IT deduction.

- Ashi (www.meritranker.com)

Agree with both and thank you