request for Clarification in depreciation calculation

I dont think Depreciation under Income Tax  Act should be calculated.

According to IT act, depreciation has to be calculated on the closing balance of the asset, but in your case you are not having any asset as on the end of the financial year.

And also, depreciation is calculated for showing asset at its realisable value, but you have already realised the asset, so no need of calculating depreciation.

Correct me if i am wrong...

Dear Venkatesh,

Please find the attached file, it will clarify the whole matter.

Regards

hitesh

Mr.Venkatesh. As per Income Tax Act, depreciation shall be calculated and allowed on assets which are in the block on 31st march. Such block should be alive i-e contain assets as well as possess positive value. Only then you can claim depreciation.

In your case, depreciation shall not be allowed as the asset has ceased to exist as on 31st march of the year.

 Hi Hitesh,

I am not able to find any file attachment with you reply. Could you please check if you have forgotten the attachment.

For others,

Thank you very much for you inputs.

Thanks,

Venkatesh

 Hi All,

       Could you guys also help me get clarified the below point as well.  

Let us consider the same asset above, And I have an Opening WDV of  2000

Cost - 10000

Category - Computer

Depreciation Rate - 60%

Added in the first half of  finacial Year 2007

Now the depreciation calculation for year 2007 would be 12000 x 60 /100 = 7200

Closing WDV  for 2007= 12000- 7200= 4800

Case(I)

In the First half of financial Year 2008, I retire this asset by selling it for 2000 Rs and the cost of removal is 500 Rs.

What would be my depreciation workout in this case?

Case (II)

In the Second half of financial Year 2008, I retire this asset by selling it for 2000 Rs and the cost of removal is 500 Rs.

What would be my depreciation workout in this case?

Please Correct me if I have made any mistakes in the calculation.

Thanks,

Venkatesh

hai ca friends

            my name is amit

can u send me deprecation chart  as per company act and as per income tax

my mail address is amit_kaykay2001 @ yahoo.com

thanks for ur help

Hi Venkatesh, You need not to calculate Depreciation if Block does not exist as on last day of the relevent FY.

If you want further clarification present your prob in easily readable form.