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Depreciation of car

Sooraj (Auditor Assistant) (25 Points)

27 December 2011

Calculate depreciation on this and reply to me urgent for the .a/y 2011-12

opening balance wdv 01.04.2010 of car 5,21,257.00

cost of new car purchased during the year 17,00,000 (Used 180 days or More)

old car sold durinjg the year 2,55,000.00

what is the depreciation amount chargeable for the a/y 2011-12 ?

THE OLD CAR IS SOLD BEFORE PURCHASING THE NEW ONE.

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8 Replies

CA Deepak Rathore (CA) (223 Points)
Replied 27 December 2011

please mention date of transction......

Paarth (Finance Associate) (210 Points)
Replied 27 December 2011

A/Y 11-12 means p/y 10-11. As nothing mentioned, we assume that the car is sold in the begining of the year, i.e. on the very first day and it is clearly mentioned that sale is made b4 purchase.

So -->

Opening balance on 1.Apr.2010 = Rs.5,21,257

Less : Sale = (Rs.2,55,000)

BALANCE ON 1.4.2010 = Rs. 2,66,257

NOW, we CAN assume : CASE 1

that the new car is purchased on the last day of the year i.e. 31st of the respective financial year end month, so calculation is as follows :

Purchase of new car = Rs. 17,00,000.

We will apply depriciation only on balance Rs. 2,66,257, NOT ON Rs. 17,00,000 as we assumed it to be purchaesd on last day so depriciation will be charged @ respective rate only on balance Rs.266257.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

CAsE 2 :

We assume that the car of Rs.17,00,000 is purchased on the very first day of the year BUT AFTER WE SOLD THE CAR of Rs. 2,55,000.

Resultant calculation will be as follows :

Purchase = Rs 17,00,000

ADD: Balance of car after sale = Rs.2,66,257

VALUE ON WHICH DEPRICIATION TO BE CALCULATED FOR A/Y 11-12 = Rs. 1966257

We will apply depriciation on balance Rs. 1966257. Now depriciation will be charged @ respective rate .

PLZ CORRECT ME ANY1 IF M WRONG.

1 Like

CA SANDESH MAHIPAL (Practicing in GST and MSME ) (1985 Points)
Replied 27 December 2011

opening balance wdv 01.04.2010 of car 5,21,257.00

cost of new car purchased during the year 17,00,000

old car sold durinjg the year 2,55,000.00(Used 180 days or More)

what is the depreciation amount chargeable for the a/y 2011-12 ?

THE OLD CAR IS SOLD BEFORE PURCHASING THE NEW ONE

sol.

op bal = 521257

+ pur. = 1700000

- sale = 255000

cl. bal = 1966257

dep. = 1966257*rate = ..........

(since old car is sold after 180 days and new car is purchased after selling the old car, so depreciation will be available on full amount of new car)

(Block concept will be applied)

suchit shah (Dy. Manager(Finance & Accounts)) (208 Points)
Replied 27 December 2011

Depriciation will be calculated according to income tax and co law seperately

as per i. tax calculation would be opening + purchase - sale = balance would be eligible for depriciation on full rate as purchase has been done before 180 days..........

As far as company law is concern it depends upon ur company hw u r following the rates and all.... it difers from company to company........

CA Mudit Agarwal PGDFM,MCP,IFR (Dy. Manager (Taxation)) (289 Points)
Replied 28 December 2011

I am also agree with Sunny...........

kuku Agrawal (Video-editor) (61 Points)
Replied 28 December 2011

WDA as on 1/4/10 = 521257

Addition = 1700000

Deletetion = 255000

Total = 1966257

Depriciation =294934

WDA as on 31/3/2011 = 1671318

Hari Kishore (Proprietor) (39 Points)
Replied 28 December 2011

Agree with Sunny..

NIKHIL RAM DIXIT (ACCOUNTANT) (21 Points)
Replied 11 February 2014

opening balance wdv 01.04.2013 of car Rs. 5,21,257.00 cost of new car purchased on 01.01.2014 Rs. 11,00,000 old car sold on 03/12/2013 4,55,000.00(Used 180 days or More) what is the depreciation amount chargeable for the a/y 2014-15 ?