12/01/2019
WRITTEN DOWN VALUE[SEC. 43(6)] : Written down value for the assessment year2018-19 will be determined as under :
Step 1 : Find out depreciated value of the block of assets on April 1, 2017.
Step 2 : To this value, add ”actual cost" of the asset acquired during the previous year ending March 31, 2018 relevant for the assessment year 2018-19.
Step 3 : From the resultant figure, deduct moneys received, receivable (together with scrap value) in respect of that asset (falling within the block of assets) which is sold, discarded, demolished or destroyed during the previous year ending March 31, 2018 relevant for the assessment year 2018-19. However, the amount of deduction cannot exceed the value of block of assets computed up to Step 2 supra.
The resulting amount is the written down value of the block of assets on March 31, 2018 relevant for the assessment year 2018-19.
One may determine the written down value for other assessment years on the similar basis.
* Slump sale : In the case of a slump sale, the following shall be reduced from the value determined after Step 2-
Actual cost of assets falling in the block transferred by “slump sale".
Less :
a. depreciation actually allowed in respect of that asset in respect of any previous year relevant to the assessment year commencing before 1988-89; and
b. depreciation that would have been allowable from the assessment year 1988-89 onwards as if that asset was the only asset in the relevant block of assets.
It may be noted that the amount of reduction under Step 3 cannot exceed the value of assets computed up to Step 2.
* Written down value in respect of assets acquired during the period when income was exempt - Explanation 6 was inserted in section 43(6) with retrospective effect from the assessment year 2003-04. It is applicable if the the following conditions are satisfied-
1. The assessee was not required to compute his total income for the purposes of the Income-tax Act for any previous year or years preceding the previous year (hereinafter referred to as “preceding previous year") relevant to the assessment year under consideration.
2. The assessee maintains books of account in respect of such preceding previous year(s).
3. The assessee provides depreciation in the books of account pertaining to such preceding previous year(s). If the above three conditions are satisfied then .
1. Actual cost of an asset shall be adjusted by the amount attributable to the revaluation of such asset, if any, in the book of account. '
2. The total amount of depreciation on such asset provided in the book of account of the assessee in respect of such preceding previous year(s)shall he deemed to be the depreciation actually allowed under the Income tax Act for the purposes of section 43(6).
3.The depreciation actually allowed as above shall be adjusted by the amount of, depreciation attributable to such revaluation.
|
About the author
Admin
|
Print