Ashok Monga (Adviser) (161 Points)
29 March 2010I am aware that the rate of depreciation for computer is 40% WDV and 16.21 SLM. If a computer costing Rs. 47390 is purchased on 20th November 2009, what will be the depreciation amount for the year. How it is calcuted for part of the year - please calculation method.
Ashok Monga
CA Pramod Jain
(manager finance)
(1577 Points)
Replied 29 March 2010
the calculation will be as follows
47390*16.21%*((31stMar10-20thnov09)/365)
Vivek Angrish
(Manager Finance & Accounts)
(232 Points)
Replied 29 March 2010
Yes, under companies act the depreciation is to be charged on assests for the no.of days for which it has been used and under the income tax act, if the assets has been purchased before or on 30th Sep.09 then for full year, if purchased after 30th Sep.09 then depreciation is to be charged for Six Months
Amir
(Learner)
(4016 Points)
Replied 30 March 2010
Dear Sir,
Agree with above replies that Depreciation under Companies Act is to be charged on pro-rata basis.
Just want to add one thing that invariably the depreciation is provided from the date of such acquisition but it can very well be an accounting policy of the company to provide the full month's depreciation in rspect of the month of acquisition. Or Conversely to provide Depreciation from the next month. In this case a disclosure would be required in notes to accounts.
praveen
(Chartered Accountant)
(6971 Points)
Replied 30 March 2010
Suresh
(CA Final Student)
(177 Points)
Replied 30 March 2010
As per companies act
Under SLM Depreciation = 2778
Under WDV Depreciation = 6855
Ashok Monga
(Adviser)
(161 Points)
Replied 30 March 2010
Gentlemen
Many thanks for your clarifications. However I cannot understand how the figure of 6855 has been arrived at. The computer was used for 141 days in the year. Hence on prorata basis the depreciation should work out to Rs.2967 i..e. Rs/ 47390X16.21X141divided by 365 and 100.
Kindly clarify.
Ashok Monga
Sagar Jataniya
(Appearing CA Final)
(100 Points)
Replied 06 September 2010
Dear Mr.Ashok,
If it is purchased on 20th November, then it figures out to be 132 days upto 31st March,
In this case, Mr.Suresh's Answer is perfect as under:
SLM : 47390 x 16.21% x 132 / 365 = 2778
WDV : 47390 x 40% x 132 / 365 = 6855
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 06 September 2010
AGREED WITH EXPERTS..
REGARDS,
MANOJ
srinivasa rao r
(Accountant)
(23 Points)
Replied 07 February 2011
Hello,
If i purchase a second hand car for Rs. 175000.00 how to calculate the depriciation as per Co, act & I.T act ?
Can some one guide me how to calculate.
Sanjoy De Sarkar
(NA)
(26 Points)
Replied 23 September 2012
Dear sirs,
I would like to know, that if a compay follows to depreciate its assets as per IT act only, then is there any liability comes to take as Deferred Tax liablity.
CA Rajendra Prasad Tibrewal
(CA Practice )
(21 Points)
Replied 04 July 2013
Dear Sir Plz clarify whether a private limited company can charge depreciation on some of its assets on SLM basis and rest of the assets on WDV basis. If yes, plz specify the relevant point of law and case study, if any.
Thanks
CAclubindia
