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 %
Answer
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%
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 |
