I have some queries in section 32 - Depreciation as per income tax act
1) suppose we have WDV ( Machine A) as on 1st april 2011 as Rs 100,000. Now we have purchased one machine B of Rs 50,000 on 10th april (put to use same day). we have sold Machine A on 30th March 2012.
Now what will be the allowable depreciation
WDV: 100,000
Add:Additions 50,000
Less:Deletions 100,000
WDV at the year end 50,000
So we will be claiming depreciation on 50,000 (Full year ) as it is more than 180 days.
My question is that won't we take any depreciation on the machinery that has been sold off during the year ie. in this case on 100,000 that has been sold off during the year.We used for nearly an year????
is there any rule that only assets on closing date will be entitled to deduction of depreciation ?? pls help
2) Is addition of assets in the case of companies act and income tax same ???
According to me they might me different.Because if for example we get a machine on 20th March 2012 and is put to use on 1st april 2012 then as per companies act we will depreciate it but as per income tax this asset will
not be included in the additions...
Am I correct???
Please answer my above questions as soon as possible ...
CAclubindia
