Non Charging of Depreciation on Additions

Others 1685 views 5 replies

Hello Everybody,
I have a query regarding Depreciation in case of a Co. The co. did not charge Depreciation in the year 2006-07 on new addition to Plant & Machinery. How to calculate the Depreciation for 2007-08 ?

Is it necessary to charge Depreciation for 2006-07? What is the recourse in this case.

Replies (5)

If the addition has taken place and was put to use 2006-07 itself, then it definitely is an omission and therefore you have to provide for arrears of depreciation for 2006-07, before providing for 2007-08

hi... In this case u can claim depreciation in this year for that year (as per AS-4) if the asset is put to use in the same year for the amount to be charged to dep. in that year. That dep amount will be charged to appropriation A/c so that it dont affect the current year profit. If u r charging dep at WDV method then the dep for current year will be charged after taking into considration that year's dep. Moreover if the asset is used for less than 180 days in the year of purchase, 50% dep will be charged and in case of 180 days or more full dep will be charged for that year. And if the Co. is a manufacturing Co. then u can claim additional dep on the same base of 180 days for the purchasing year. In case of necessity, claiming dep for that year year will be benificial from income tax point of view.

Yes if put in to the use dep. to be provided, if not then before providing the dep. for the next year the same tobe provided Pl refer sec 25 of the copanies Act, before delcare divided it must provided

yes as per section 32 it is mandatory to claim dep.if the asset has been put to use,so in your case if the co. has not claimed the dep.you have to calculate it first for the year 2006-07,then on the balance amount you will claim in the year 2007-08

Originally posted by :DIXIT VERMA
" hi... In this case u can claim depreciation in this year for that year (as per AS-4) if the asset is put to use in the same year for the amount to be charged to dep. in that year. That dep amount will be charged to appropriation A/c so that it dont affect the current year profit. If u r charging dep at WDV method then the dep for current year will be charged after taking into considration that year's dep. Moreover if the asset is used for less than 180 days in the year of purchase, 50% dep will be charged and in case of 180 days or more full dep will be charged for that year. And if the Co. is a manufacturing Co. then u can claim additional dep on the same base of 180 days for the purchasing year. In case of necessity, claiming dep for that year year will be benificial from income tax point of view. "


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