Is cost of smartphone deductible?

602 views 2 replies

Tamal Mukherjee

Software Developer

31 Points Joined July 2012

Hi there,

I work as a freelance mobile application developer. I bought two phones - Android phone (cost Rs.11k) in April'11 and an iPhone 4S (Cost Rs.44.5k) in Dec'11. The purpose of these phones are strictly for development, testing and debuging of apps that I develop. I rarely use these phones for my personal use (I have a cheap nokia phone for that).

Question:

1. Can I show cost of smartphones as expenses? Is it fully deductable? (Btw. I wish to allocate 80% of invoice value as expenses, if possible).

2. Can I claim depreciation of those phones in next years filing? if yes, is it @ 15% for Smartphones?

As per requirement of my profession I may have to purchase more than 1 phones every year and I'm wondering if deductions and depreciations are allowed here.

I'd reallly appreciate your reply.

Thanks!

Tamal

Replies (2)

Ankita Benegal

CA Final

66 Points Joined December 2010

Your profession is developing mobie apps and the phones you have purchased for your research and development purpose,should be categorized as depreciable capital assets .You can claim depreciation @ 15%p.a on the WDV on the same every year.And you cannot show these as expense and claim depreciation as if that happens, logically that would amount to Double Tax shield which would,in no way be permissible.