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imthiyaz (Tax software Devt professional)     27 September 2009

Additional depriciation

Whether addtional dep can be claimed for subsquent year of purchae or asset put to use ? Or it is applicable for only first year? Sec 32( 1) (iia)   says "in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii) :"

Clause (ii) says abt WDV method of dep where in which dep can be claimed for subsquent year also?

Reply me

with thanks

 



 12 Replies

Manmohan ACA, CS

Manmohan ACA, CS (Chartered Accountant )     27 September 2009

Additional depreciation can be claimed on the new plant and machinery in the year of acquisition @ 20 % (or 10 % if used less then 180 days ) on original cost.

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (CA, M. com)     27 September 2009

Yes, Additional depreciation can be claimed in subsequent years too, don't worry..

Manmohan ACA, CS

Manmohan ACA, CS (Chartered Accountant )     27 September 2009

 

 

 

Originally posted by :D н ! я σ J
" Yes, Additional depreciation can be claimed in subsequent years too, don't worry.. "

Dhirakj rectify ur knowledge 

 

 

See provison relating to additonal depreciation (an extract from my personal income tax notes )

Additional depreciation [Sec. 32(1)(iia)]
 
Applicability
Additional depreciation is applicable on all assessee engaged in the business of manufacture or production of any article or thing.
 
Conditions to be satisfied
1.       Assessee must be an industrial undertaking, which manufactures or produces any article or thing.
2.       Assessee acquired and installed after 31st March, 2005, a new plant or machinery, other than the following:
  • *Ships and air crafts; or
  • *Any plant or machinery which was used either within or outside India by any other person before such installation; or
  • *Any plant or machinery installed in office premises or any residential accommodation or guest house; or
  • *Any office appliances or road transport vehicle; or
  • * Any plant or machinery, which is eligible for 100% deduction (whether by way of depreciation or otherwise) in any one previous year.
Please note that : Additional depreciation shall be available only on plant and machinery and not on other asset like furniture, building, etc.
 
3.       Assessee furnishes -
·          the details of plant and machinery and increase in installed capacity of production in Form 3AA along with the return of income; and
·          the report of a chartered accountant certifying that the deduction has been correctly claimed in accordance with the provisions of this clause.
 
  • Rate of additional depreciation
Rate of additional depreciation is 20% of actual cost of such plant or machinery.
However, if the asset is acquired and put to use for less than 180 days then the rate of additional depreciation will be 10% of actual cost.
 

additional point to be considered
1.        Additional depreciation is available to industrial undertaking.
2.        Additional depreciation shall be allowed even if the block has nil or negative value.
3.        Additional depreciation is available only in the year of acquisition and installation of plant or machinery and not afterwards.
4.        Additional depreciation shall be subtracted while computing the closing written down value of the respective block.
5.        Additional depreciation is not available if the new plant or machinery is sold in the year of acquisition.

 


(Guest)

Additional depreciation is available only in the year of acquisition and installation of plant or machinery and not afterwards

Ca Gesu Agrawal

Ca Gesu Agrawal (Internal Auditor )     15 October 2009

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Sanjay

Sanjay (CA Final n CS Final)     19 October 2009

Hi Imtiyaz. Additional depr. can be claimed ONLY in the Year of put to use.

That too on Original cost.

However, ONLY HALF depr can be claimed if Asset is put to use for less than 180 days.

indrajeetdarji

indrajeetdarji (ca )     28 November 2009

whether additional depreciation can be claimed if the plant & machinery is given on lease

Aditya Maheshwari

Aditya Maheshwari (CA in Practice)     28 November 2009

Originally posted by :indrajeetdarji
" whether additional depreciation can be claimed if the plant & machinery is given on lease  

"

No as it is to be used in the business of manufacture or production of any article or thing

Hareesh H Sharma

Hareesh H Sharma (Cleared IPCC..now article)     28 November 2009

 It can only be claimed ONCE and in the year of acquisition and installation..I guess most of the questions raised here are well answered in Manmohan sirs notes

Sunali

Sunali (Learner)     28 November 2009

Yes, only in the year of acquisition..as per the section...acquistion AND installation both must be done in the same year.

kabirsen

kabirsen (student)     28 November 2009

 additional dep can be only claimed in 1st yr i.e. yr of put to use.

subsequent yr not available because in subsequent yr,s the p/m does not remain "new"

the word "new" has been specifically used in the provision relating to additional dep.

new asset means which hv not been subject to depriciation...effectively add. dep available in 1st yr of put 2 use

lalitind

lalitind (CA Practice )     22 October 2012

it appears that every one has been prejudiced in reply. they have presumed that since additional depreciation is allowed, it has to be only in the first year. if a proper analysis of the section is done there does not appear to hold any such presumption or prejudice. in the provision prior to 01.04.2005, the words "in any previous year in which such undertaking begins to manufacture" or "during any previous year in which it achieves the substantial expansion", but there is no such conditions attached in the substituted section. in fact a new class of asset has been created that is "any new machinery or plant which has been acquired and installed after the 31st day of March, 2005". as a new class has been created, there do not appear to be any bar in claiming additional depreciation in the subsequent years too.

 


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