Question

How to calculate depreciation as per income tax act? And if date of purchase of an sset is 5 jan 2018 and its date of put to use is 14 jan 2019 then what will be its depreciation

Answer 1

Depreciation under the Income Tax Act is a deduction allowed for the decline in the real value of a tangible or intangible asset used by a taxpayer. The Income Tax Department uses the concept of depreciation for the purpose of writing off the cost of an asset over its useful life.

Depreciation is a mandatory deduction and the Act allows the deduction either under straight-line method or written down value (WDV) method. They calculate the deduction for depreciation under the WDV method except for undertaking engaged in generation or generation and distribution of power. The Act also allows a deduction for additional depreciation in the year of purchase in certain circumstances. To read about additional depreciation visit Additional Depreciation Under the Income Tax Act.