Additional Depreciation (Section 32)

TOTAL BLOCK OF MACHINARY  :-  1800  LKS

WDV DEP :- 1000*15%=150      15% RATE OF DEPRICIATION

NEW MACHINERY :-600*25%=150  FOR NEW MACHINERY ACQ. SO 15% FOR FULL YEAR , HOWEVER USAGE LESS THAN 180 DAYS  SO 10% ALLOWED   

OLD MACHINERY :- 200*15%=30    CANT CLAIM ADD. DEP.

TOTAL DEPRICIATION :-   330

WDV AS ON 31-3-2011:-1470        (1000-330)

TOTAL DEPRECIATION TO BE CHARGED IN P&L A/C WILL BE RS 285/-CRORE . ACCORINGLY THE WDV WILL BE RS 1515/-CRORE

Assuming rate of depreciation for the block as 15%

edit:and it to be used for manufacturing/production purposes

Depreciation on WDV of P&M=1000*15/100=150
For Purchased New machinery Depr=(800-200)*(7.5+10)/100=105
(as p&m is used for less than 180 days in the py)
For Purchased Old machinery Depr=200*7.5/100=15
(ADDl dep not available for old mach)

Total dep=270
wdv at the end=1530

total dep. to be charged-270

1000 *15%=150

600 *(7.5 +10)%=105

200 *7.5%=15(as per info. u given)

total value of block=1800

less-dep.                =270

wdv                           =1530

Please find the attached solution 

After Refering to the File ----> The WDV as on 31.3.2011 comes to 1545

Then allow the normal depreciation @ 7.5 % on second hand machinery i.e. Rs. 15

The Answer comes out to 1545-15 - 1530

Additional Dep is allowed only if machinery purchased for MANUFACTURING purpose otherwise normal rate shall be charged.

15% if more than 180 days used in a year

7.5% if less than 180 days used in a year

Originally posted by : AMIT BHUTTANI
	Additional Dep is allowed only if machinery purchased for MANUFACTURING purpose otherwise normal rate shall be charged. 15% if more than 180 days used in a year 7.5% if less than 180 days used in a year

 And Dep is allowed on such additional Plant and Machinery @ 20% if used for more than 180 days otherwise 10% if less than 180 days is used

opening wdv              1000

+purchases                  800

- depreciation               270*

closing value of wdv  1530

*on opening wdv                  150

purchases + additinal dep   120              

total                                            270

accoring to u all the usage of the machinery  start on 1.12.2010 is the important date to decide the dep.

now the question is :-

suppose company  purchase a truck , which is not working condition and send for repairs and its in the garage through out the year  and not use by company , can company charge deprication on that :- acc. to all of  u no

second , if company puchase a machinery , suppose additional boiler in oil industry , which they normally do , if the main boiler is not going to work they take out  the main boiler and fit the new one and get there work done so this additional boiler is not in use , suppose if the additional boiler is not in use all ther year u mean to say , the depriciation cant be claim on that

again , if  a genrator is purchase for the supply of electricity incase of power back up , if  no power cut through out the year and the genrator had not been put to use then u cant claim depriciation .

just think twice , so according to me even if the machinery is not in use unless and until there is lock out in the industry the deprication can be claim wheather it was in use or not in use , however  additional depriciation cant be claim unless and until new machinery put to use

so , the new machinery is bound to have a depriciation of 15 % for the whole year and 10% additional depricaition ..

you are very much correct but this is not always true mr. ram for eg air conditioner (just for example say though not allowable as additional dep) which is cheap in month of winters and some co. purchases them in winters but they actualy put to use them in summers. Therefore actual put to use and procurement date could be different by many reasons... 

and secondly the theoratical and practicle things are some what may be sometime very much different.

sahil u r talking of irrelavent things what about  ac and all , the main matter on which we differ are

1will the depriciation allowed from date of purchase or from date of use

now do one think  just go to page no  241  of t n manoharn and find what i  m telling

if  a is owner of machinery and b  is using the machinery  , who can claim the depricaition :-