Additional Depreciation (Section 32)

Total Block of Machinery = 1800cr

Dep on WDV Machinery = 1000*15% =150cr

Dep on new machniery = 800*7.5% =  60cr

(During the year machinery used less than 180 days so dep rate is 7.5%)

Additional Dep rate on new machniery 20%

Additional Dep. = (800-200)*10%  60cr

(During the year machinery used less than 180 days so dep rate is 10% and additional dep is not avbl on old machiery)

Total Dep as on 31-03-2011 =  270cr

WDV as on 31-03-2011    = (1800-270)=  1530cr

Some Assumptions

1  New Machinery use only for manufacturing purpose.

2. Total Block dep rate 15%

Originally posted by : ramsinghania
	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 ..

I read about it that in court of law they consider that the machine is in "usable condition from" not "used from ".so as far as this question is concerned(as it doesn't give full details) depreciation of 270lakh should be provided when the machine is not in usable condition till 1-12-2010.But i don't understand your point that you can provide 15%(full) as normal depreciation and 10%(half) as additional depreciation i.e., it should have been either 35% or 17.5%

as far as deprication is consider the date on which the machinery / brought and ready for use should be taken as a date from where u can charge the deprication , although the machinery is ready for use but not use , so  u can take a depriciation of full year , like for example if u purchase a car  before 30 th september u can take a full year deprication , its dnt matter whether u use the car or not

suppose u purcahse a car on 1 st september but u had not even touch the car u can claim for deprication for full year ...

however as far as additional deprication if u want to claim additional deprication the condition is that  the machinery should be use for more than 18o days , if u had not use the machinery for more than 180 days u cant claim 20 %  , as the machinery is not been use for  more that 180 days  u cant claim 20%  u can claim only 10%

tell me onething on that car example if i purchase a car  on  30 septermber at  the close of the working day , what deprication rate i am going to claim for  its  15 %  or  7.5%

its obviosly  15 %  , again  for additional deprciation  as per the clear wording use more than 180 days  , so here we had not use the machinery for more than 180 days so we can claim 10 % additional depricaition

hope its clear if not then refer to t.n. manoharan for furtue details