Which date is considered while calculating normal and additional depreciation u/s 32?Is it the date of acquisition or the date when machine was put to use?
Bimal Thacker
(Proprietor)
(762 Points)
Replied 23 January 2010
It is the date from which machine is first put to use.
C.Balaji
(Learner)
(1867 Points)
Replied 23 January 2010
Mr.Bimal
why date of use and not date of acquisition?? please clarify
Bimal Thacker
(Proprietor)
(762 Points)
Replied 23 January 2010
If any assests acquired but not put to use whether you can claim depreciation?
Bimal Thacker
(Proprietor)
(762 Points)
Replied 23 January 2010
If any assests acquired but not put to use whether you can claim depreciation?
manish
(Article Assitant)
(358 Points)
Replied 23 January 2010
| Originally posted by : FATEMA | ||
 |
Which date is considered while calculating normal and additional depreciation u/s 32?Is it the date of acquisition or the date when machine was put to use? |  |
As per the section 32 Depreciation, The date on which the machine was put to use is considered.
Where any asset is acquired by assessee during the previous year and PUT TO USE for less than 180days in that previous year. then depreciation shall be restricted to 50% of the depreciation allowable.
But the restriciton of half depreciation is applicable only in the 1st year in future year, full depreciation shall be allow even if it is used for a single day.
Ajay
(Accountant)
(72 Points)
Replied 23 January 2010
as per Accouting standered 6 depreciation
its clear mention that depreciation measure of wearing ,consumption,wether use or not charge deprecaition...If company purchase assets but not use asset for operation then also charge deprication .
for corect profit shown in Profit & Loss account
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 23 January 2010
Calculation of normal depreciation is started from the date on which asset was put to use which is as follows
Block of Assets as on 31 st March xxxx
Less: Assets put of use for less than 180 days xxxx
Balance Amount xxxx
Take 100% depreciation on balance amount and 50% on assets put to use for less than 180 days.
For additional depreciation u/s 32(iia) in case machinery or plant(except aircraft and ships) which has been acquired or installed on or after 01.04.2005, by an assessee engaged in the business of manufacture or production of any article, sum equal to 20% of actual cost is also allowed as deduction, provided fulfilling certain conditions
Correct me if i am wrong
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 23 January 2010
| Originally posted by : Ajay | ||
|
as per Accouting standered 6 depreciation its clear mention that depreciation measure of wearing ,consumption,wether use or not charge deprecaition...If company purchase assets but not use asset for operation then also charge deprication . for corect profit shown in Profit & Loss account |
|
I think this is posted in Income Tax forum so we are talking according to provisions of tax and not accounts or companies act.
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 23 January 2010
| Originally posted by : C.Balaji | ||
|
Mr.Bimal why date of use and not date of acquisition?? please clarify |
|
According to me in Income Tax it is put to use because if it is not put to use then it is not used to generate income and if it is not used to generate the income than expenses for that should also not be allowed. It just my interpretation. I am not considering AS 6 and Companies Act, 1956 provisions here.
Divya K S
(CA)
(289 Points)
Replied 23 January 2010
Hi,
As per AS - 6, Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes.
Hence, depreciation must be charged to assets even when not put to use.
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 23 January 2010
hi friends,
depreciation can be claimed from the date on which it is put to use. Use means not only active use, it also includes passive use., eg0 generator s purchased. its not used for the whole year because of regular electricity supply. but still depreciation can be claimed
RADHIKA JALAN
(agarwal)
(1521 Points)
Replied 23 January 2010
shudhanshu is correct......................
Hello friends,
As far as companies act is concerned you can claim depreciation if the asset is ready for use. That is successful completion of trial run.
In General it depend on class of assets. If the depreciation is provided on the basis of obsolesence then charging depreciation from date of put to use will be wrong. But if the depreciation is provided on the basis of wear and tear then charging depreciaiton from the date of put to use is correct.
As far as income tax act is concerned the act provides for depreciation from the date of put to use only.
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
CAclubindia
