does we have to charge depreciation on gold jewellery
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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.
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.
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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