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Enhanced Depriciation - for how many years?

Sunil (CA in Practice) (94 Points)

09 October 2007

Good Day!!

\Please Clarify whether the Enhanced Depreciation u/s. 32(1)(iia) can be availed:
1) only in the year of purchase or
2) from the year of purchase till the (New)Asset's WDV becomes Nil or
3) from the year of Purchase till the block becomes NIL or
4) from the year of Purchase till the new Asset is sold out.

Regards
Sunil D

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3 Replies

CA Harsh Joshi (CA) (23 Points)
Replied 10 October 2007

I think you are asking about additional depreciation. It is allowable if you are preparing statement of fixed assets according to Income tax act. It is important to note that additional depreciation is allowed only in the first year of purchase if the method of depreciation is written down value and the rate is 30%.

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ADDITIONAL DEPRN IS @ 20 % ONLY. AVAILABLE ONLY IN THE YEAR OF PURCHASE. IF ASSET PUT TO USE FOR LESS THAN 180 DAYS IT WILL BE RESTRICTED TO 10 %. ALL ASSESSEES ARE NOT ELIGIBLE FOR ADDITIONAL DEPR'S.

Sunil (CA in Practice) (94 Points)
Replied 10 October 2007

Good Day!! Can any one quote any ref on the basis of which it is said that the Enhanced Depreciation so called Additional Depreciation is available in the year of Purchase. Section 32(1)(iia) is silent on it as far as my understanding of the section goes. Pls repsond Keep [:)]