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from which date depreciation should be charged????

(Guest)

1april 2009 machinery installed,1st june 2009 inaugration,1 july trial run,1 august 2009 commercial production started.

so from when should depreciation be charged?????????

could anyone tellme with reason????????

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20 Replies

CA MARUTHI GANDHI (JOB) (60 Points)
Replied 19 October 2009

Originally posted by :astha mishra
"	1april 2009 machinery installed,1st june 2009 inaugration,1 july trial run,1 august 2009 commercial production started. so from when should depreciation be charged????????? could anyone tellme with reason????????	"

Depreciation has to be charges from the date of commercial production(First put to use). in my openion is should charged from 1st Aug 2009.

1 Like

gurdeep singh (CA Article Assistant ) (60 Points)
Replied 19 October 2009

Originally posted by :astha mishra
"	1april 2009 machinery installed,1st june 2009 inaugration,1 july trial run,1 august 2009 commercial production started. so from when should depreciation be charged????????? could anyone tellme with reason????????	"

according to what AS-6 says..." it doesnt say anything about it "..oh my god.ridiculous...u knw i really think that it should say somthing abou it.. how can they be so careless about not writing this BIG topic u and i m r talkin about... shame on all...waise what do u think kya hona chahiye??..agar jawab mile muje b batana

(Guest)

i understand gurdeep why r u saying like this ..............but plz let them reply too before drawing any conclusion.

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 19 October 2009

date when it is first put to use is the date of capitalisation here the trial run date .But since depreciation also arises due to efflux of time and there is not much time gap between the date of installation and date when it is first put to use it is suggested to get a certificate from the technical engineer and then start depreciating accordingly

1 Like

Shashi Bhushan (Learner, Jalandhar) (996 Points)
Replied 19 October 2009

according to Income Act depreciation will be allowed at 15% for full year as its put to use for more than 182 days.

as per Accounting Standards above discusion hold good.

also see what Companies Act 1956 say about this.

1 Like

Bonita (trainee) (218 Points)
Replied 19 October 2009

for income tax pupose depreciation will be claimed from the date when it is put to use..i.e actual use but will also be chagred for the period of trial run so in my opinion it will be charged from july 01, 2009

1 Like

CA DEEPAK ARORA (EMPLOYEE) (49 Points)
Replied 19 October 2009

as per accounts

DEPRECIATION IS CHARGED FROM THE DATE WHEN IT WAS FIRSTY READY TO USE .THAT IS 1ST JULY IN YOUR CASE.

AND as per INCOME TAX ACT

DEPRECIATION IS CHARGED FROM THE DATE WHEN THE ASSET IS FIRSTY PUT TO USE .

SO IN YOUR CASE DEPRECIATION WILL BE CHARGED AS PER INCOME TAX FROM 1ST AUGUST BECAUSE THIS IS THE DATE WHEN THE MACHINE IS PUT TO USE .

1 Like

(Guest)

Depreciation will be charged from the date when it is first put to use. In this case as per Income Tax Act depreciation will be chgd at the rate 15% for the AY 2010-2011 since it is used for more than 182 days. There will be no depreciation for the AY 2009-2010.

1 Like

gurdeep singh (CA Article Assistant ) (60 Points)
Replied 19 October 2009

Originally posted by :deepak chugh
"	as per accounts DEPRECIATION IS CHARGED FROM THE DATE WHEN IT WAS FIRSTY READY TO USE .THAT IS 1ST JULY IN YOUR CASE. AND as per INCOME TAX ACT DEPRECIATION IS CHARGED FROM THE DATE WHEN THE ASSET IS FIRSTY PUT TO USE . SO IN YOUR CASE DEPRECIATION WILL BE CHARGED AS PER INCOME TAX FROM 1ST AUGUST BECAUSE THIS IS THE DATE WHEN THE MACHINE IS PUT TO USE .	"

thanks i am truly satisfied with ur answer

(Guest)

thankyou every one for clearing my doubt.

Sumit Jain (CA) (4760 Points)
Replied 19 October 2009

poonam is right

The Harshit Aggarwal (B.Com(H) ,CS Final) (5278 Points)
Replied 19 October 2009

Originally posted by :Poonam Thanvi
"	Depreciation will be charged from the date when it is first put to use. In this case as per Income Tax Act depreciation will be chgd at the rate 15% for the AY 2010-2011 since it is used for more than 182 days. There will be no depreciation for the AY 2009-2010.	"

Agree with Poonam !