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

Depreciation as in a gain

Bhavin (Articled assistant) (104 Points)

29 December 2013

Depreciation is always treated as a loss in books of accounts but in certain circumstances it can be a gain can't it??

Reply
Follow
Share

4 Replies

CA Gyati Gupta (In Practice) (8227 Points)
Replied 30 December 2013

Depreiation can be seen as gain as u get deduction for the same in income tax, and hence lower your profit resulting in less tax liability....

1 Like

Bhavin (Articled assistant) (104 Points)
Replied 31 December 2013

Yes... But say for eg: If i am using someone else's owned car then the depreciation on that car is definitely a loss for the owner but it will be a gain for me. I was saying that way.

Yogesh Shah (Managing Corporate Finance) (1051 Points)
Replied 01 January 2014

Hi Bhavin,

Chill dude .. can you explain that in which way depreciation of another person will be your gain??

Depreciation is a notional amount. It never physically moves in or out.

Further, asset value is indeed evaporated over the years and hence depreciation is allowed to be claimed. It is loss indeed but not the income of anyone.

Particularly in assets like cars etc (which don't get appreciated over the years like land, ancient thing), your statement is not valid.