Depreciation on block of assets

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 February 2016 Dear Experts, weather dep. is calculated on assets or block of assets if on block of assets...... assume.. i have three assets computer, car, furniture, as per income tax the dep. rate is different on all these three assets and on 31/3 we are charging dep. on assets wise i.e 60% on computer, 15% on car, 10% on furniture.. plzz clarify clarify how dep. is calculated on block of assets with an example... Thanx in Advance

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 February 2016 1. Depreciation is calculated on block of assets.
2. New Appendix I of Rule 5 specifies the block of assets and depreciation rate for each block
3. A total of 4 blocks have been specified for tangible assets
4. All assets falling within a block or sub-block are to be treated as one block. For eg. Plant A, Plant B and Plant C are depreciated at 15%. So they will be combined and will form one block. Similarly Car 1, Car 2 & Car 3 are depreciated @ 15%. So they will be combined and will form one block. Similarly for other assets.

Querist : Anonymous

Querist : Anonymous (Querist)

05 February 2016 sir assume in the books we have only two assets one plant one car both are eligible for 15% dep.. plz clarify weather both these assets will cover the definition of block of assets or not..

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 February 2016 Even one asset can constitute a block of asset. Accordingly plant will be first block and computer will be second block.
So you will have 2 blocks for Income Tax purpose.

Querist : Anonymous

Querist : Anonymous (Querist)

05 February 2016 ok.. sir assume we have sold the car and the wdv of the car was exceed then selling price plz let me know can we adjust the loss with plant or it will be written off in p/L a/c, i.e. WDV on 1/4 100000, selling price 90000, loss 10000, assume the WDV of plant is 200000 on 1/4 then can we charge dep. on 200000 plus 10000 i.e on 210000, plzz clarify.