Depreciation

Respected sir / Mam , required below answer ............. 1) my client purchase one car on dated 01.10.2015 , of Rs 8,50,000/- . how to calculate depreciation . Please advise .
Replies (1)

as per companies act-----"Motor buses, motor lorries, motor cars and motor taxies other than those used in a business of running them on hire charge depreciation, at SLM method at 11.88% and under WDV method 31.23% per annum"

 

as  per income tax act ---- "Motor cars, other than those used in a business of running them on hire, acquired or put to use on or after the 1st day of April, 1990"-- charge depreciation at 15% per annum"

if you are choosing income tax act you can claim full year depreciation for the asset because it is using in the business more than 180 days.

if it used in business then you can claim the depreciation in the books of business.

if it is personal nature, then to the extent that the vehicle is used for personal purposes depreciation could be proportionately disallowed by tax authorities.

Regards.....

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