Dep on Asset when put to use

This query is : Open

varun gupta (Querist)
Follow

30 May 2009 Depriciation on a newly purchased Asset should be calculated from the Date when the Asset has been put to use. Is this rule applicable under both Income tax Act & Companies Act or how differenty it shd be treated under two Acts?

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
Follow

30 May 2009 Yes, it is under the both act.

CMA KNVV Sri Vidya - Sri Kanth

CMA KNVV Sri Vidya - Sri Kanth (Expert)
Follow

30 May 2009 Yes

Upgrade to CAclubindia Pro. Subscribe Now!

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
Follow

30 May 2009 i think in companies act depreciation is calculated from the date of purchase..

taxindiaconnect

taxindiaconnect (Expert)
Follow

01 June 2009 Under both the Acts the deprecation is calculated from the date of Put to use, the difference is that the in The Companies Act the depreciation is calculated on prorata basis in no of days an asset is used during the FY from the date of put to use to last day of the FY. Say if an asset is put to use on 1st July the deprecation will be calculated for 274 days. While in Income Tax Act the depreciation is calculated in full if the put to use for more then 180 days and 50% is put to use for less then 180 days in a year. In the above example the deprecation will be allowed 100% as the asset is put to use for more then 180 days. Hope this clarifies the query.

Neha Desai

Neha Desai (Expert)
Follow

28 July 2012 "I would say..Companies Act talks about the asset being "ready to use" while Income Tax law talks about the asset being actually "put to use.

Message likes : 1 times