Depreciation on leasehold premises ?

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CMA. Subhash Kumar Jha (Querist)
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26 May 2009 We are a pvt ltd co. & run in a leasehold premises. Its a lease for 2 years.

We have made wooden cabins / workstations / electrical fittings in this premises.

All of these cost around 16 lacs Rupees. The premises was put to use during May, 2008.

What should be treatment of Depreciation in income tax Act & In companies act.

Thanks

Subhash

Vipul J. Bhavsar

Vipul J. Bhavsar (Expert)
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26 May 2009 Assuming that the company wants to stay in the business for a long period. i.e. more than one year, the company should capitalise the assets that have been installed in the leasehold premises. Wooden Cabins/electrical fittings should be treated as Furniture and Fittings. Workstations as Computers etc.
Accordingly depreciation should be claimed from May 2008