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Regarding Depreciation.

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Jarnail Singh

22 Points Posted on 29 June 2021

In last two years we do not claim the Depreciation in books and not in ITR of Firm. But not in last current year we want to claim the Depreciation in books and ITR aslo. How to treat the book entry of depreciation of last two years. I donot route the entry of depreciation via capital account. Pls solve the query.

Replies (2)

Quick Summary

This discussion addresses how to claim depreciation in the current year after not claiming it for the past two years, both in the firm's books and Income Tax Return (ITR). The advice given is to calculate the opening Written Down Value (WDV) as if depreciation had been deducted previously. For the ITR, this adjusted WDV is used to claim current year depreciation. In the books, however, the missed depreciation from the prior two years needs to be routed through the capital account.

veerendar singh

tax consultant

1829 Points Posted on 29 June 2021

Can you please explain why you didnt take depreciation in past years. was it because you opted for 44ad or for some other reason?

Ankita Jain

CA in practice

101 Points Posted on 30 June 2021

Claiming of depreciation is not an option but a mandatory deduction.
In ITR, Calculate the opening WDV as if you have already deducted depreciation for last 2 years. Then claim depreciation for the current year.
And in books, you will have to route the entry via capital account