Query on Depreciation

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31 Points Posted on 20 July 2011

In order to save RTO tax an PVT. LTD. Company have purchased car in the name of Director.

1)Loan is taken in the name of Director.

2) Down payment & other payment such as insurance are made by the company.

3) Every month loan installment is paid from the company's A/c.

4) Company is showing CAR as fixed asset in its Balance Sheet & car is used by the Company.

WHETHER DEPRECIATION CAN BE AVAILED BY THE COMPANY?

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Asst. Manager- Internal audit

244 Points Posted on 20 July 2011

Provsion under Income Tax states:

Eligibility for Depriciation

1) Assets must owned by the assessee.

ii) Assets must be used during the Financial year.

Here in your case The car purchased is being owned by the Director but not by the company. (Existence of company is diffrent than its Directors)

Therefore Depreciation under Income Tax will not be allowed under Income Tax Act.

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