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Depreciation for non business use assets
For normal business assets depreciation expense, it is debited to PNL account but how to take depreciation entries for non business use assets (i.e., personal use assets)
Replies (21)
Quick Summary
Not eligible..You may reverse or disallow in computation
Depreciation is not allowed on personal assets. if the assets are showing in balance sheet, only then the depreciation is allowed on those assets.
Assets should be used for business purposes then only depreciation can be claimed ..Else it can't be allowed
For example, I have a car of Rs. 10 lacs in my personal name. So, while preparing balance sheet for every year will it remain same as 10 lacs?
If it's in personal name then it will be adjusted in capital and not in Property Plant and Equipment.
It it is in business then only it will come in PPE.
So there is no requirement to show in PPE
It it is in business then only it will come in PPE.
So there is no requirement to show in PPE
I am talking about my personal balance sheet and not of business, please suggest that way, what will be the value of the car in my personal balance sheet year on year?
There is no such personal balance sheet concept in accounts..
Only one balance sheet will be there and there won't be two balance sheets like personal and business
Only one balance sheet will be there and there won't be two balance sheets like personal and business
Well, forget about business, I have no business.
I am a salaried person and I have other incomes from other sources and I have a car in my name, what will be the value of the car in my balance sheet year on year
I am a salaried person and I have other incomes from other sources and I have a car in my name, what will be the value of the car in my balance sheet year on year
There is no requirement for salaried employee to prepare balance sheet ..
How much is your gross salary ?
How much is your gross salary ?
If you're maintaining your personal accounts in detail, then think of the car as a mutual fund investment, i.e. no change in value until it's sold.
You list the item under movable assets at the cost price. And it sits there unchanged until you sell it.
At the time of sale, simply account for the difference under capital withdrawn (99.99% of the time you're going to get less money from selling the car than what you paid for it). So technically there is no loss in terms of tax treatment.
What if I have been depreciating it for last 2 years?
Reverse it and pay income tax
| Originally posted by : Aniket Kumar | ||
 |
What if I have been depreciating it for last 2 years? |  |
Have you been claiming that as an expense to reduce your tax liability?
If so, then naughty boy! Stop doing that!
I have been debiting depreciation to capital account for 2 years
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