Depreciation on asset

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 November 2013 if depreciation is willing fully not deducted to increase the value of asset, and return is filled, then what will happen?...is it right to explain that it is expenditure and i dont want to claim it...

Nikhil Kaushik

Nikhil Kaushik (Expert)
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03 November 2013 Yes you can do so. It is not mandatory to make claim for depreciation allowance.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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03 November 2013 Depreciation allowance is mandatory w.e.f assessment year 2002-03 and onwards as per explantion 5 to section 32(1) of the Income tax Act,1961.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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03 November 2013 Ya agree with Warrier sir. Sorry for my earlier comment. The decision of Mahendra Mills was nullified by the amendment in the Act through this explanation.

CA Pallav Singhania

CA Pallav Singhania (Expert)
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03 November 2013 Agree with Expert Warrier Sir,

Depreciation is mandatory from AY 2002-03 and shall be allowed or deemed to have been allowed irrespective of claim made in the profit & loss account or not.

However, Where the asset is not exclusively used for the purpose of business or profession, the depreciation shall be allowed proportionately with regards to such usage of assets (sec. 38).

Section 32(1) provides that depreciation is to be computed at the prescribed percentage on the written down value of the asset which in turn is calculated with reference to actual cost of the assets.

In the context of computing depreciation, it is important to understand the meaning of the term ‘WDV’ & ‘Actual Cost’