Depriciation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2012 I have purchase PCS machinery (pollution control system) for my company on 26.03.2011

but i have not charged depreciation for the year 2010-2012 due to end of the year purchased

do i start depreciation from this year or its not right ?

please give me advice what to do ?

how to do Year 2011-2012 Dep. Entry ?

thanks....

CA Rakesh Goenka

CA Rakesh Goenka (Expert)
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09 April 2012 dep should be charged for 5 days. ok.....and if back dated entry facility available then make entry.. 1) Depreciation A/C Dr TO Provision for Depreciation 2) p/L A/c Dr to depreciation A/C
and if back dated entry facility not available then,,,, 5 days depreciation should be treated as prior period Item & then entry will be 1) Prior period item A/c Dr- to provision for dep 2) P/L a/c DR to Prior period item ok

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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10 April 2012 No problem if you have not charged depreciation in financial year 2010-11. Now you can charge depreciation for the shole year at the specified rate of income tax if you are not a company assessee. In case of company you have to charge the depreciation as per the schedule for the purpose of your account and the same has to be calculated agains for income tax purpose. Entry shall be Depreciation ..Dr. and Credit to the respective machinery.

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Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2012

machinery was purchased on 26 mar and still no depreciation charged and next year full depreciation on it.

do it is right ?

CA Kishore Tallam

CA Kishore Tallam (Expert)
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10 April 2012 Two things need to addressed here. One as per accounts and another as per income tax.
As per books, since the accounts would have been adopted by this time, provide depreciation from date of capitalisation. If the depreciation amount is material, then it will be treated as prior period expense, else it can be treated as normal depreciation.
In respect of income tax, claiming of depreciation is mandatory and its not an option to assessee. Since the asset was in use for less than 180 days half year depreciation will be available. If ur company is engaged in manufacture of article and the machinery purchased is new one, then additional depreciation also can be claimed. Hence, the PY return has to be revised to give this effect and the WDV has to be carried forward to the current year.