Depreciation on land

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P. Shah (Querist)
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24 March 2016 plz anyone can clarify my doubt's and confusion. I know that depreciation is charged on fixed assets like plant and machinery , tools and equipment , furniture and fixtures and computer etc. But what about land. coz it appreciates over a period of time

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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24 March 2016 Depreciation is reduction in the value of an asset due to usage and / or efflux of time. Land is one asset that doesn't depreciate due to the efflux of time. On the other hand as you have rightly observed it appreciates over a period of time. Hence the depreciation tables made under the Income Tax Rules or the Schedule to Companies Act does not prescribe any rate of depreciation for land. However, the value of any asset installed or constructed on land depreciates as per the prescribed norms and provision for the same is made.

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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25 March 2016 Land is such an asset whose value goes on increasing unlike other assets whose value gets reduce over a period of time.

All assets wear out and eventually cease to exist, except land. Land is not considered to ever be able to be destroyed, so it can’t lose value and go down to zero value like other assets.

The land generally retains or increases in value Over the long term, land will go up in value over because the demand is always increasing, while they are not “making” any new land.

Can you what is the useful life of a Land? No.

So no depreciation on land.

P. Shah

P. Shah (Querist)
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31 March 2016 Thanks a lot to Mr Suresh and Mr Sanjay for resolving my queries.

P. Shah

P. Shah (Querist)
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31 March 2016 Thanks a lot to Mr Suresh and Sanjay for resolving my queries. Sorry for late reply as I was traveling out of town.

P. Shah

P. Shah (Querist)
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31 March 2016 Thanks a lot

P. Shah

P. Shah (Querist)
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31 March 2016 Thanks a lot for resolving my query