Does we have to charge depreciation

does we have to charge depreciation on gold jewellery
Replies (8)
Quick Summary
This discussion clarifies whether depreciation needs to be charged on gold jewellery used for business purposes. Based on the Income Tax Act and accounting standards like AS-10, gold jewellery is generally not considered a depreciable asset. However, if the gold is held as an investment under AS-13, its market value may need to be adjusted annually, impacting the profit and loss account.

What is the nature of business ?

Is it stock ?
Not a stock
What is the nature of business ?

Is gold used for business purposes?
For instance - if gold is used for business operation does we have to charge depreciation ??
Depreciation on gold jewellery should not be charged. As per Explanation 3 to Section 32(1) of the Income Tax Act, For the purposes of this sub-section, the expression "assets" shall mean—
[a] tangible assets, being buildings, machinery, plant or furniture.

Also, as per section 2(11) "block of assets" means a group of assets falling within a class of assets comprising—
[a] tangible assets, being buildings, machinery, plant or furniture.

As per the above sections, Gold jewellery is not a asset and depreciation will not be charged.
Gold is not a PPE as per AS-10 . Hence depreciation is not applicable. Check if mark to market is applicable
What is mark to market
If it is covered under Invest category as per AS-13 then market value of gold will be updated by financial year and balance will debited or credited to profit and loss towards depreciation or appreciation.

Check AS-13 once

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