Determine the amount of depreciation

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