Wdv in case of revaluation
This query is : Resolved
28 September 2012
Explanation 6 of sec 43 of IT ACT which is for an assessee who is not required to compute income for the purpose of IT Act says
" The total amount of depreciation on such assets provided in the books of the assessee in respect of such previous year shall be deemed to be the depreciation and adjustment of Revaluation amount "
Please advise with illustration .
" The total amount of depreciation on such assets provided in the books of the assessee in respect of such previous year shall be deemed to be the depreciation and adjustment of Revaluation amount "
Please advise with illustration .
28 September 2012
There is no concept of revaluation in income tax.
depreciation is calculated on WDV without giving any effect of revaluation
depreciation is calculated on WDV without giving any effect of revaluation
28 September 2012
Yes sir i am totally agree but in case if any one who is not required to compute tthe income as per income tax (earing Exempt Income) enters into taxable business and he has revalued his Business Assets in pevious years then what will be the WDV in case he enters into taxability
28 September 2012
What type of exempt income did you have?
28 September 2012
Agriculture income
28 September 2012
Pls read explanation 7 to section 43(6).
For the purposes of this clause, where the income of an assessee is derived, in part from agriculture and in part from business chargeable to income-tax under the head "Profits and gains of business or profession", for computing the written down value of assets acquired before the previous year, the total amount of depreciation shall be computed as if the entire income is derived from the business of the assessee under the head "Profits and gains of business or profession" and the depreciation so computed shall be deemed to be the depreciation actually allowed under this Act.
Accordingly, the depreciation will be deductted as if it is actually allowed and no effect will be given to revaluation.
For the purposes of this clause, where the income of an assessee is derived, in part from agriculture and in part from business chargeable to income-tax under the head "Profits and gains of business or profession", for computing the written down value of assets acquired before the previous year, the total amount of depreciation shall be computed as if the entire income is derived from the business of the assessee under the head "Profits and gains of business or profession" and the depreciation so computed shall be deemed to be the depreciation actually allowed under this Act.
Accordingly, the depreciation will be deductted as if it is actually allowed and no effect will be given to revaluation.
28 September 2012
What about exempt business income other than Agriculture
28 September 2012
Plz advice along with suitable illustration
28 September 2012
Even if you dont have any business income then also depreciation debited to profit & loss a/c will be deemed to be actually allowed.
now onwards you will get depreciation on WDV so arrived at.
now onwards you will get depreciation on WDV so arrived at.
28 September 2012
If he has considered deprecation on revaluation then how the same will be treated
28 September 2012
Revaluation and depreciation on revaluation both will be excluded.
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