27 September 2012
Dear Sir, Suppose a Car whose market price is Rs. 5 lacs including insurance, taken on loan and 50000/- paid by owner in cash and remain 4.5 lacs are loan amount. And Rs. 1 lac paid as car instalment during the FY.
On the 31 March what would be car cost for charging depreciation. 1. Rs. 5 lacs 2. Rs. 1 lac 3. Rs. 1.5 lacs
27 September 2012
The value of car for the purpose of depreciation will be 5 lakhs minus the amount of insurance charge. insurance will be allowed as a business expense. while Rs 4.5 lakhs will be the amount of loan to be shown as liability. The interest portion from the amount of installment will be allowed as business expense.
CAclubindia
