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Depreciaiton

Utav shah (Article student) (26 Points)

24 February 2012

If business cease to exist at the end of the year. how much depreciation should be charged?

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6 Replies

ACCOUNTANT (Student) (559 Points)
Replied 25 February 2012

Depreciation can be charged for the whole time when the asset was put for use............here in the case it would be at normal prescribed rate for whole year...........as the running period was throughout...........

Utav shah (Article student) (26 Points)
Replied 27 February 2012

What will be the depreciaiton when the business was in existence for only 1 month (i.e the month of April) and thereafter the business was wounded up

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 27 February 2012

Depreciation should be provided for one mnth only as per companies act,1956

Utav shah (Article student) (26 Points)
Replied 28 February 2012

Ya, u are right that depreciation should be provided for 1 day only, but what shall be its impace in income tax

Mazhar Shaikh (Intern) (72 Points)
Replied 28 February 2012

In your case you need to provide depreciation as per income tax for the whole year .

ACCOUNTANT (Student) (559 Points)
Replied 03 March 2012

Well...if the asset was purchased and used in the same yr. for less than a period of 180 days.........then it is to be charged only upto 50% of normal rate allowed,........

If the asset was used in previous yrs. then full dep.. can be charged