When one of the assets within the block has been sold (i.e the block continues to exist after the transfer) Is it compulsory to have the block depreciation system(i.e (Opening Balance - Sales consideration of the asset transferred)*Rate) or can we go for depreciation on individual items and transfer profit/ loss on sale of those items thereon.?
If compulsory , from which date it has been made compulsory.?
The Block system has been inserted from AY 1988-89 in the Income TAx Act.
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As per Income Tax Act, w.e.f. A/Y 1988-89, depreciation has to be charged on block of assets basis, not on individual assets basis.
Depreciation is allowed in Income tax as per block concept only. Its a mandatory charge. However in companies Act its not same.
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