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Depreciation under income tax act

arunkumar (ca ipcc group 1 passed) (40 Points)

16 June 2012

If fixed asset purchased in cash then how depreciation is applied under income tax act

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10 Replies

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 16 June 2012

Same procedure is to be followed, charge deprn at the applicable rates to teh FA.

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CA Mukul Mittal (CA in practice) (384 Points)
Replied 16 June 2012

Cash purchase won't change the principle of depreciation.

work is worship (Service) (2728 Points)
Replied 17 June 2012

Whether cash or any other mode of payment , depreciation procedure is same.

However as per Rule 6 D OF IT ACT, cash provision above INR 20,000 is disallowed. for expenses

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 17 June 2012

Mr work is worship, cash disallowance is not applicable for B/S items. only for the items that are routed through P&L the disallowance is applicable. Depreciation being a loss the disallowance as per Rule 6DD is N/A.

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CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 17 June 2012

Originally posted by : CA Mukul Mittal
	Cash purchase won't change the principle of depreciation.

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CA sumit chejara (ca final) (99 Points)
Replied 17 June 2012

Disallowance of payment exceeding Rs 20000 does not apply for payment of fixed assets.............

CMA Siyad Abdul salam (Cheif Accounts and Costing Officer) (23 Points)
Replied 17 June 2012

"Mode of purchase does not change the Rule of Depreciation under Income Tax Act", So it is treated as usual u/s 6 D of Income Tax Act and apply the Applicable rate (Specified in Income tax Act) to the Concerned Block of Asset.