TAX DOUBT

op. WDV on 1.1.08                  75,00,000

addition on 1.8.2008              10,00,000

value of blockon31.3. 2009   85,00,000

rate of dep                                    15%

dep amt.                                  (75,00,000*.15)+(10,00,000*1/2*.15)=12,00,000

Computation of depreciation admissible under section 32 

written down value as on 1/4/08 – 75,00,000 @ 15%               1125000

 new plant and machinery installed

Cost of  new plant and machinery                                       10,00,000

Add: interest for the period from 1/8/08 to 1/11/08

(i.e. for 3 months) being interest for the period

before the asset is first put to use = 10,00,000×10%×3/12            25000

Actual cost of plant and machinery                        10,25000

Depreciation on actual cost of new plant and machinery

Normal depreciation = 10,25,000×15%×50%                                   76875

Additional depreciation = 10,25,000×20%×50%                               102500

                                                                                                         179375

Admissible depreciation for the year                                                                         1304375