Question ID : 29575

Depreciation

A Company has discarded some assets. It has not sold but only scrapped. Whether the WDV of these assets has to be deducted from while calculating depreciation under IT Act? Sec.32(1)(iii) stipulates it. Under IT Act, individual assets WDV may not be available as it forms part of block. What treatment to be given in respect of discarded assets under IT Block?

Answer ID : 65495

Only sale amount has to be deducted. Even it is discarded it form part of block

Answer ID : 65513

sale consideration of the assets discarded is to be deducted from the block of the assets otherwise kept the same in the assets till sold.

Answer ID : 65532

Better to treat the same as Scrap Sale for Rs.1000- or any amount and deduct the same out of the respective Block of Assets and than calculate Depreciation on the balance amount. In the Income Tax Act, Individual WDV of the asset is not deducted.

---