Either Full Depreciation or Half Depreciation

If asset is put to use for 180 days or more in the year of purchase, then full depreciation

Otherwise half depreciation

If asset purchased and used on last day of the year,still half depreciation

 

Note:-

Date of Put to Use is important not Date of Purchase

 

Cut off Date is 3 October

If asset purchased and put to use till 3 October,then full depreciation as number of days till 31 March will be 180 or more

 

If asset put to use after this date,number of days will be less than 180

Check

Month No of days
From 4th  October 28
November 30
December 31
January 31
February 28
March 31
Total 179

Note:- In 2015-16 Financial Year,since 2016 is a leap year,there is one day extra in Feb,hence cutoff date is 4 October

Check

Month No of days
From 5th  October 27
November 30
December 31
January 31
February 29
March 31
Total 179

Q1

Furniture Purchased for 500000 on 20 Sept,2014.It was put to use same day

Calculate Dep for 2014-15

Dep on Furniture is 10%

View

 Q2

Furniture Purchased for 500000 on 20 Sept,2014.It was put to use on 15 Feb 2015

Calculate Dep for 2014-15

Dep on Furniture is 10%

--answer--

No of days from 15 Feb to 31 March is less than 180

Hence half depreciation

=500000*10%*1/2

=25000

Date of Put to Use is Important,Not Date of Purchase


  Q3

Calculate Dep for FY 2015-16 on Furniture in Q2

--answer--

   
Opening WDV 475000
500000-25000  
Less  
Dep @10% 47500
Closing WDV 427500

--endanswer--

  1. Income Tax
  2. PGBP Income
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST Training in Delhi. Register now.