calculation of depreciation

It is the date from which machine is  first put to use.

Mr.Bimal

why date of use and not date of acquisition?? please clarify

If any assests acquired but not put to use whether you can claim depreciation?

If any assests acquired but not put to use whether you can claim depreciation?

i agree Mr.Bimal

Originally posted by : FATEMA
	Which date is considered while calculating normal and additional depreciation u/s 32?Is it the date of acquisition or the date when machine was put to use?

As per the section 32 Depreciation, The date on which the machine was put to use is considered.

Where any asset is acquired by assessee during the previous year and PUT TO USE for less than 180days in that previous year. then depreciation shall be restricted to 50% of the depreciation allowable.

But the restriciton of half depreciation is applicable only in the 1st year in future year, full depreciation shall be allow even if it is used for a single day.

as per Accouting standered 6 depreciation

its clear mention that depreciation measure of wearing ,consumption,wether use or not charge deprecaition...If company purchase assets but not use asset for operation then also charge deprication .

for corect profit shown in Profit & Loss account

Calculation of normal depreciation is started from the date on which asset was put to use which is as follows

Block of Assets as on 31 st March                                                 xxxx                      

Less: Assets put of use for less than 180 days                         xxxx

Balance Amount                                                                               xxxx

Take 100% depreciation on balance amount and 50% on assets put to use for less than 180 days.

For additional depreciation u/s 32(iia) in case machinery or plant(except aircraft and ships) which has been acquired or installed on or after 01.04.2005, by an assessee engaged in the business of manufacture or production of any article, sum equal to 20% of actual cost is also allowed as deduction, provided fulfilling certain conditions

Correct me if i am wrong

Originally posted by : Ajay
	as per Accouting standered 6 depreciation its clear mention that depreciation measure of wearing ,consumption,wether use or not charge deprecaition...If company purchase assets but not use asset for operation then also charge deprication . for corect profit shown in Profit & Loss account

I think this is posted in Income Tax forum so we are talking according to provisions of tax and not accounts or companies act.

Originally posted by : C.Balaji
	Mr.Bimal why date of use and not date of acquisition?? please clarify

According to me in Income Tax it is put to use because if it is not put to use then it is not used to generate income and if it is not used to generate the income than expenses for that should also not be allowed. It just my interpretation. I am not considering AS 6 and Companies Act, 1956 provisions here.

Hi,

 As per AS - 6, Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes.

Hence, depreciation must be charged to assets even when not put to use.

hi friends,

depreciation can be claimed from the date on which it is put to use. Use means not only active use, it also includes passive use., eg0 generator s purchased. its not used for the whole year because of regular electricity supply. but still depreciation can be claimed

shudhanshu is correct......................

Hello friends,

As far as companies act is concerned you can claim depreciation if the asset is ready for use. That is successful completion of trial run.

In General it depend on class of assets. If the depreciation is provided on the basis of obsolesence then charging depreciation from date of  put to use  will be wrong. But if the depreciation is provided on the basis of wear and tear then charging depreciaiton from the date of put to use is correct.

As far as income tax act is concerned the act provides for depreciation from the date of put to use only.