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Depreciation when propietorship is converted to firm

19 June 2014

How depreciation will be calculated u/s 32 of Income tax when a proprietorship firm is converted to partnership firm in the middle of the financial year. eg prop firm from 01.04.13 to 31.07.13 and partnership from 1.8.13

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Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 19 June 2014

if the book value of assets is same as was in proprietorship then calculate dep. for whole year and then divide it proportionately between prop. and partnership firm....... if assets were taken over at another value then, dep. to be calculated on value in prop. for no. of days it was prop. concern and on the book value of partnership firm for remaining no. of days.