Depreciation on asset received in gift

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2010 can i claim depreciation on the asset received in gift, if yes, on what amount and at what rate, under which section it is prescribed.

Aditya Maheshwari

Aditya Maheshwari (Expert)

10 May 2010 Explanation 2 to section 43 states as under:
Explanation 2.—Where an asset is acquired by the assessee by way of gift or inheritance, the actual cost of the asset to the assessee shall be the actual cost to the previous owner, as reduced by—

(a) the amount of depreciation actually allowed under this Act and the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922), in respect of any previous year relevant to the assessment year commencing before the 1st day of April, 1988; and

(b) the amount of depreciation that would have been allowable to the assessee for any assessment year commencing on or after the 1st day of April, 1988, as if the asset was the only asset in the relevant block of assets.]

CA Suresh Kumar Agarwal

CA Suresh Kumar Agarwal (Expert)

10 May 2010 Dear you are eligible to claim Depreciation on the assets which you had received in gift.

Rate of Depreciation will be same as allowed on the similar assets.

Cost will be cost of previous owner reduce by Depreciation claimed by him.