LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

depreciation allowable on Cash transactions exceeding Rs 10000?

03 June 2018

Dear all
suppose I purchased assets costing Rs. 35000

for which I made payment in cash
01/05/2018. Rs. 10000
02/05/2018. Rs. 10000
03/05/2018. Rs. 10000
04/05/2018. Rs. 5000

is this assets eligible to claim depreciation us 43 of income tax act 1961???

Reply
Follow
Share

6 Replies

CA Sunil Kumar (Chartered Accountant) (4514 Points)
Replied 03 June 2018

Yes, this asset is eligible to claim depreciation as payments did not exceeds 10000/- made to a person in a day. Amended provision is, where an assessee incurs any expenditure for acquisition of any asset in respect which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees, such expenditure shall be ignored for the purposes of determination of actual cost of such asset.

1 Like

rama krishnan (12234 Points)
Replied 04 June 2018

agree with Sunil sir

akshay kumar garg (student) (73 Points)
Replied 04 June 2018

thanks to all for such a prompt and proper reply
thanks

BIBIN P B (Tax practitioner) (99 Points)
Replied 09 July 2018

sir please tell me in which sub section above law is mentioned.

chandra sekar (Manager-Accounts) (387 Points)
Replied 20 November 2018

pls clarify, this applies even for a building or land purchase and any payment of cash more thn Rs 10000/- in a day, will be disallowed for calculating depreciation