Does we have to charge depreciation

Atharv Sankliya (504 Points)

11 May 2022

does we have to charge depreciation on gold jewellery

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Eswar Reddy S (CFO- at NHTF) (13277 Points)
Replied 11 May 2022

What is the nature of business ?

Is it stock ?

Atharv Sankliya (504 Points)
Replied 11 May 2022

Not a stock

Eswar Reddy S (CFO- at NHTF) (13277 Points)
Replied 11 May 2022

What is the nature of business ?

Is gold used for business purposes?

Atharv Sankliya (504 Points)
Replied 11 May 2022

For instance - if gold is used for business operation does we have to charge depreciation ??

Kev Men (521 Points)
Replied 12 May 2022

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.

Eswar Reddy S (CFO- at NHTF) (13277 Points)
Replied 12 May 2022

Gold is not a PPE as per AS-10 . Hence depreciation is not applicable. Check if mark to market is applicable

Atharv Sankliya (504 Points)
Replied 12 May 2022

What is mark to market

Eswar Reddy S (CFO- at NHTF) (13277 Points)
Replied 12 May 2022

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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