Mr.X Purchased a Shop in the Multi- Stored Marketing Complex for Rs.10 lakhs, after that he constructed a Show Room in that shop and started a Proprietorship Business. The construction cost of the show room is Rs. 12 lakhs. Please determine the amount of depreciation (rate of depreciation :10%).
Menu
Determine the amount of depreciation
Replies (8)
AFTER INCLUDING THE COST OF CONSTRUCTION THE TOTAL VALUE OF THE SHOP WILL INCREASE TO 22 LAKHS. SO DEPRECIATION WILL BE 10% ON 22 LAKHS.
HEY FRND I MAY NOT BE RIGHT BUT THIS WAS JUST MY OPINION
REGARDS
VAISHALI CHHEDA
but i think,the cost of Shop Rs.10 lack should not consider for depreciation.Because day by day the value of shop is increasing, how can it's value depreciate ? Only cost of construction of Show Room consider for depreciation i.e. 10% of 12 lakhs = 1.2 lakhs. (i am not sure but it is my view).
Thanks.
| Originally posted by :Vijay Kr. Mishra | ||
| " | but i think,the cost of Shop Rs.10 lack should not consider for depreciation.Because day by day the value of shop is increasing, how can it's value depreciate ? Only cost of construction of Show Room consider for depreciation i.e. 10% of 12 lakhs = 1.2 lakhs. (i am not sure but it is my view). Thanks. |
" |
Sir, Dont worry... Building is an asset which is eligible for depreciation.
Think of it as a tax allowance for the opportunity cost of your investment.
And Dept will ask you for capital gains tax when you sell the building, to allay all your fears about capital appreciation of the building...
total cost of the showroon is Rs 22 lac because 10 lac is basic cost and 12 lac (which is 120% of cost) is a major exps according to its bookvalue, so it will count as addition in the value of showroom,
So depriciation will be count at Rs 22 lac
and as above said that value of property is going increase day by day, this will be calculate later, when we will sell the property then there will be profit or loss, whcih will debit or credit t profit & loss account according to its nature
if the asset is put to use for more than 180 days in the Previous year, then depreciation shall be Rs. 2,20,000.00 else if it less than 180 days, then depreciation allowance shall be half of it. i.e.Rs. 1,10,000.00
Yeh thats all is right
By mr amol
Yeah...Ravinder singh ji and amol are right..
Depriciation should be charged on 22 lacs
Recent Topics :
- Report in GSTR 1 ( Credit Note ) for Wrong GST Rat
- Reply of summons issued under section 70 of the cg
- How to Bulk GSTIN Number Verify and Validation
- OPC Annual Filing Defaults – Need Guidance t
- OPC Annual Filing Defaults – Need Guidance t
- FCGPR of a past period
- Discuss and Download CA Final Question Paper Nov 2
- Does Parag gupta's booster batch good for CA Inter
- Police Bandobost and GST Invoice
- Understanding where manual effort goes in audit wo
Related Topics :
CAclubindia
