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Weather computer hard drive is an asset?

CA Sagar Davda (Manager) (46 Points)

27 January 2016

Weather computer hard drive(disk) is an asset or it is to be expense out in books? If it is an asset then what is rate of depreciation for the same under income tax act.

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7 Replies

RAHUL (Student CA Final ) (377 Points)
Replied 27 January 2016

It is an asset and depreciation rate will be 60%

vishnu bhardwaj (Tax Advocate) (212 Points)
Replied 27 January 2016

yes this is a improvment of assesst and it include in assessts and depreciation will be charged in assets depreciation percent.

chandra (student) (528 Points)
Replied 27 January 2016

If you are buying new harddisk in addition to your harddisk in computer, it is an asset. Capitalise it as Computers.

If you are buying Harddisk as replacement of your existing Harddisk then expense it and charge it to computer maintainance account.

1 Like

CMA Poornima Madhava (CMA) (13097 Points)
Replied 27 January 2016

I agree with Chandra

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 28 January 2016

If I m buying new hard disk in addition to existing hd & the cost is less than Rs. 5000 then is it capital expenditure..??

harsh (student) (125 Points)
Replied 28 January 2016

Yes it is , irrespective of the amt incurred on it..

RAHUL (Student CA Final ) (377 Points)
Replied 28 January 2016

Even when you are replacing the asset, it should be noted that- if the new hard drive results in increases the standard performance of the computer than the existing one. Whether the technology used in making the new hard-drive is different/ new leading to better performance. If yes, then should be capitalised.