Depreciation as per income tax

Tax planning 468 views 8 replies
One of our clients has acquired plant and machineries in AY 2014-15. However, these assets were put to use in AY 2015-16 starting from 1st of November 2014 (i.e. for a period less than 180 days). Query Wether depreciation as per income tax will be charged for full year or half year (considering the fact that assets were acquired in last year and put to use in current year)? Please help!! Urgent!
Replies (8)
Depreciation allow for half year because put to use consider in income tax.
Sorry,depreciation allow full yearly because some conditions in IT

What Conditions? Even I am in favour of full year depreciation however i am unable to find anything material to prove my stand. Please help!!

For determining the 180 days limit, you need to count only the days starting from the day on which the asset is put to use. So in your case, only half of the normal depreciation can be claimed.

Hi Vicky,

Under the plain reading of your question its clear that only 50% of depreciation will be allowed to you as the asset is put to use for the purpose of business or profession for less than 180 days(Relevant to AY 2015-16).

Rather full depreciation can be claimed if asset was ready to use , the term used in Sec 32 "use" for the purpose of business or profession includes ready to use. (CIT vs Vindhyanchal distillaries, CIT vs Vishwanath Bhaskar Sathe).

Regards,

Karthik V Kulkarni

You have to consider the date of use for the asdte
100% dep is allowed The restriction of 50% is applicable only in the yera of purchase

As per my understanding of the subject, without involving into any conflict with income tax department we should take half of depreciation on plant & machinery because same was put to use for business in current year and also same was for less than 180 days.


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