Depreciation in case of cash system of accounting

Tax queries 860 views 1 replies

 

In case the assessee is following cash system of accounting...then how depreciation will be calculated under Income Tax Act from the date of payment or from the date of put to use?
 
In case suppose advance is paid for fixed assets purchased in april and asset is put to use in october then at which rate depreciation will be calculated? Full rate or half rate...
Replies (1)

Dear Vaibhvi, Depreciation on Fixed Asset is provided from the date asset is put to use. It would be tantamount to cooking of books if you provide Depreciation based on advance payment.

 

 

Section 32 will be read before applying the method as assumed by you.

 

 

 

Thanks

Mihir Doshi


CCI Pro

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