If a car dealer uses a car for trial run then at what rate it will be depreciated
Depreciation on car used for trial run
(Guest)
8 Replies
Joey Tribbiani
(fdg)
(2010 Points)
Replied 29 September 2010
I think it shud be taken to Plant and machinery block @ 15%
thiruvayu
(FCA)
(155 Points)
Replied 29 September 2010
It is a demonstration equipment/vehicle. So naturally it should go to Plant & mahinery and vehicles @ 15% slab rate
vinod jain
(Learner)
(40 Points)
Replied 29 September 2010
According to me, as the demo vehicle is being used for business purposes, depreciation should be charged @ 30%
CA Shiv
(Business Controller)
(2987 Points)
Replied 30 September 2010
Well it depends upon the situation.
For car dealer it is not a Fixed asset. Its held as stock in trade... ITs not in the name of the dealer... SO in tht case no depreciation will be charged..
You can charge at 15% if its in name of the dealer.
Normally in case of Machinery, depreciation at 15% is allowed for deduction.
Ca Aashish Upadhyay
(CONSULTANTS)
(913 Points)
Replied 30 September 2010
We treat DEMO CAR As Fixed assets . and charge Depreciation @ 15%
The underlying principle is that that DEMO CAR is for the purposes of attracting Sales and it is not meant for Sale in Short Run. I will differ with Shivang!
CA Shiv
(Business Controller)
(2987 Points)
Replied 30 September 2010
Sir,
Thats why i told that if the dealer is the owner than depreciation can be charged.....
SOmetime The car amanufacturer gives car for demo and is not sold ( like wat normally its done by TATA in certain cities to attract sales.) than depreciation cannot be charged..
DEfinately its my opinion...
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 30 September 2010
In most of the cases such cars don't belong to dealer, such cars are provided by company for advertisement purpose. So, since dealer is not the owner, he can't claim depreciation. Upto my knowledge, its a commission based business.
In case if he owns, then it would be @ 15%.
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