Depreciation Calculation as per Income Tax

Practical Income Tax
Income Tax for Audit Cases (Non Co)

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 2019-20 Financial Year,since 2020 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 %

No of days from 20 sept to 31 March is more than 180

Hence full depreciation at 10%

Dep on Furniture

=500000*10%

=50000

#### 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%

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