Capital Asset
Depreciation is cost of the asset
over its useful time
Capital Asset
Example
All computers, laptops, printers
and software under the block of computers.
Rate: 60%
Example
All items of furniture under the head of
furniture.
Rate: 10%
It allows depreciation
for the block as a whole
by the Written Down Method.
Calculation of Depreciation
Opening WDV
Amount
+Addition 1
Amount
+Addition 2
Amount
-Deduction
Amount
WDV before
depreciation
Amount
Amount
+tive
Amount
Amount
-tive
TOTAL
Depreciate at
full Rate
Depreciate
at Half Rate
Total
Depreci
ation
Block of Asset
Rate
10%
15%
Purchased IPR
Building
Plant & Machinery
Plant & Machinery
Furniture
Plant & Machinery
Intangible Assets
Factory building
Factory Land
Wind Mills
Building
Plant & Machinery
15%
10%
60%
25%
10%
80%
WDV WDV on
on
March 31
1 April before dep
Dep @
15%
WDV on
March 31
after dep
2011-12 0
15% *
No asset after Oct 1 60 = 9
51
2012-13 51
119
2013-14
119
0 + 60 = 60
119
17.85
101.15
WDV WDV on
on
March 31
1 April before dep
2011-12 0
Dep @
15%
WDV on
March 31
after dep
51
51 + 89 40
= 100
15
85
85
12.75
72.25
0 + 60 = 60
No asset after Oct 1
2012-13 51
2013-14 85
PY
WDV WDV on
on
March 31
1 April before dep
2011-12 0
0 + 60 = 60
No asset after
Oct 1
Dep @
15%
9
WDV on
March 31
after dep
51
Key points
Addition 20% depreciation
New machinery
Only for the first year
Assessee engaged in manufacture/
production of any article or thing.
Yes
No
Yes
No
No
No
No
No
No
Yes
No
2012-13
2013-14
WDV WDV on
Dep @
on
March 31
1 April before dep
WDV on
March 31
after dep
200
200+100
=
300
200x15% +
(20%
+15%)100=
30+35 = 65
235
235
235
235x 15%
= 35.25
199.75
2012-13
WDV WDV on
Dep @
on
March 31
1 April before dep
400
2013-14 505
WDV on
March 31
after dep
400+200
=
600
400x15% +
(1/2)(20%+
15%)200=
60+35 = 95
505
505
505x 15%
=75.75
429.25
WDV WDV on
on
March 31
1 April before dep
2013-14 4
4+1=5
Dep @
60%
WDV on
March 31
after dep
PY
2013-14
WDV WDV on
on
March 31
1 April before dep
1
Dep @
10%
WDV on
March 31
after dep
0.1
0.9
ON
100% or 1 time
of the Exp.
Will be allowed
(Except cost of
Land acquired)
Yes
Article or
thing
specified in
the list of the No
Eleventh
Schedule?
200% or 2 times of
the Exp. Will be
allowed .
(Except cost of:-Land acquired 0%
-Building Acq.
100% or 1 time)
Weighted deduction
Social Science
or Statistical
Research
Scientific
Research
To
Approved
Institution
To a
Company
175% or
1.75 times
of Exp.
125% or
1.25 times
of Exp.
To National
Laboratory or
IIT or University
(for Approved
programme )
200% or
2 times of
Exp.
125% or
1.25 times
of Exp.
Sec.35-Scientific Research
Innovision Ltd. is a company engaged in manufacturing
of computer chips. It incurs following expenditure in
lakhs towards research during the P.Y. 2013-14.
Calculate the allowed deductions:
Nature of Expenditure
Purchase of Research
equipment
20
150
40
60
60
continued
Innovision Ltd. is a company engaged in
manufacturing of computer chips. It incurs following
expenditure in lakhs towards research during the
P.Y.2013-14. Calculate the allowed deductions:
Nature of Expenditure
Admin. exp. for research
center
10
12
24
Sec.35-Scientific Research
Blue Ocean Ltd. is a company engaged in
manufacturing of cosmetics. It incurs following
expenditure in lakhs towards research during the
P.Y.2013-14. Calculate the allowed deductions:
Nature of Expenditure
Purchase of Research
equipment
20
150
20
60
60
continued
Nature of Expenditure
Admin. exp. for research
center
12
1
1
5
12
Amortisation
One:
Only certain listed kinds of expenditure
are eligible for amortisation.
These are:
Company formation
Feasibility Reports
Public subscriptions
Two:
Only up to 5% of the size of business
can be amortised.
Three:
Spread over five years
in equal measure from the year of
start of business.
Continued
Nature of Exp.
10
90
40
20
Yes
Yes
Yes
10
90
40
Yes
20
10
No
Total 170
Aggregate Deduction restricted
to ___%
5 of Cost of Project(2500)
1/5th deduction each year, for five years, starting
from the year the business commences= 25
160
125
Loan
Corporate
loan
Loan for
new editing
machine
Interest
period
Regular
business
activity
50
Before
machine is
put to use
20
50
Treated as capital
expenditure.
Eligible for
depreciation
THANK YOU