Examples of each different conditions for claiming depreciation: A. Block of assets: 1. Mr.Rahul Mehta acquired a building at Nasik of Rs.

50,00,000 and air condition of Rs.60,00,000 as on March 31,2013.What will be the different block of assets? Solution: The blocks of Assets are as followsClass of Assets: Building Building at Nasik- 5%(50,00,000)=2,50,000. Class of Assets: Plant & Machinery Air Conditioner-25%(60,00,000)=1500,000. 2. Mr.Sunil Pal acquired a Pollution control equipment of Rs.50,000 and Trade Mark of Rs.10,00,000 as on March 31,2013.What will be the different block of assets? Solution: The blocks of Assets are as followsClass of Asset: Plant & Machinery Pollution control equipment-50%(50,000)=25,000. Class of Assets: Trade Mark Trade Mark-25%(10,00,000)=2,50,000. 3. Ms.Sheetal Gupta owns a Building at Mumbai of Rs. 70,00,000 and Patents of Rs.30,00,000 as on March 31,2013. What will be the different block of assets? Class of Assets: Building Building at Mumbai-10%(70,00,000)=7,00,000. Class of Assets: Patents Patents-25%(30,00,000)=7,50,000.

B. Written down value: 1. Machinery of Mr.Rehaan shows WDV of Rs.50,000 as on 1-4-12.New Machinery is purchased for Rs.2,00,000 as on 1-11-2012.Old Machinery was sold on 1-5-12 for Rs.30,000.Calculate depreciation @20%for previous year 2012-13. Solution: Depreciations on M/c for previous year 2012-13 Date 1-4-12 1-5-12 Particular WDV Sold Balance(old Block) 1-11-12 31-3-13 31-3-13 Purchased Balanced(Total Blk) Depreciation On 2,00,000*20%*1/2 20,000 On 20,000*20% 4,000 24,000. 2.Mr.Ravi acquired M/c, shows WDV of Rs.60,000 as on 1-4-12. New M/c is purchased for Rs.1,00,000 as on 1-09-12, Old M/c was sold on 1-5-12 for Rs.70,000. Charge Depreciation at 10%. Solution: Depreciation on M/c for previous year 2012-13. Date 1-4-12 1-5-12 Particulars WDV Sold Rs 60,000 (70,000) Rs 50,000 ( 30,000) 20,000 2,00,000 2,20,000

Balance(old Block) 1-09-12 31-3-13 31-3-13 Purchased Balance(Total Blk) Depreciation

(10,000) 1,00,000 90,000

On 90,000*10%*7 mnth 5,250 95,250. 3.Ms. Kareena owns a M/c,shows WDV for Rs.80,000 on 1-4-12.New M/c is purchased for Rs.2,00,000 on 1-5-12 for Rs.50,000. Charge Depreciation at 10%. Solution: Depreciation on M/c for previous year 2012-13. Date 1-4-12 1-5-12 Particulars WDV sold Balance(old Block) 1-12-13 31-3-13 31-3-13 Purchased Balanced(Total Blk) Depreciation On 2,30,000*10%*4 mnth 7,667 On 30,000*10% 3,000 10,667. Rs 80,000 (50,000) 30,000 2,00,000 2,30,000

C. When an Assets is put to use for less than 180 days in the year of acquisition: 1. Mr.X acquired M/c ,shows WDV of Rs.60,000 as on 1-4-12. New M/c purchased on 1-213of Rs.40,000. Old M/c sold for Rs.30,000 on 1-5-12. Charge Depreciation at 10%. Solution: Depreciation on M/c for previous year 2012-13. Date 1-4-12 1-5-12 Particular WDV sold Balance 1-2-13 31-3-13 31-3-13 Purchased Rs 60,000 (30,000) 30,000 40,000

Balance(Total Blk)70,000 Depreciation On 40,000*10%*1/2 2,000 On 30,000*10% 3,000 5,000.

2.WDV as on 1-4-12 of Rs.90,000.New M/c as on 1-1-13 of Rs.30,000.Old M/c of Rs.40,000 was sold on 1-5-12. Charge Depreciation at 10%. Solution: Depreciation on M/c for previous year 2012-13. Date 1-4-12 1-5-12 Particulars WDV sold Balance(old Block) 1-1-13 Purchased Rs 90,000 (30,000) 60,000 30,000

31-3-13 31-3-13

Balance(Total Blk) Depreciation On 30,000*10%*1/2 On 60,000*10%

90,000

1,500 6,000 7,500.

D. Compution of additional Depreciation: 1. Mrs. Kavita Pal purchased plant and M/c of Rs.50,000on March 31,2009 and Depreciation to be calculated @10%. She decided to charge additional depreciation @5%.Calculate depreciation amount? Solution: Plant and M/cDep@10% 50,000 (5,000)

Additional dep@5% (2,500) 42,500. 2. Mr Salman purchased Plant and M/c of Rs.60,000 as on March 31,2009 and Depreciation to be Calculated @20%, he decided to charge addition dep. @10%. Calculate depreciation? Solution: No additional Depreciation will be charged as Plant and M/c is acquired before March 31,2010. 3. M/c is installed in office premises on 31 March,2010.Decidedf to charge additional dep.@10%.calculate depreciation amount? Solution: No additional Depreciation will be charged as M/c is acquired for office premises and not for business.

E. Unabsorbed Depreciation: 1.During the assessment year 2013-14, Mr. Kishan Raos car Depreciation amt is Rs.50,000and profit before charging depreciation are Rs.10,000. Calculate the unabsorbed depreciation? Solution: Profit before charging depreciation-10,000 Less: Depreciation Unabsorbed depreciation (50,000) 40,000.

Unabsorbed Depreciation is adjusted against income from other business, income under other heads,or carried forward and added to dep. allowance (2013-14). 2. M/s Kishore & sons furniture depreciation amted to Rs.70,000. Profit before charging depreciation is Rs.20,000. Calculate the unabsorbed depreciation? Solution: Profit before charging depreciation-20,000 Less: Depreciation Unabsorbed depreciation (70,000) (50,000).

3. Mr. Kapil Sharma Building depreciation amted to Rs.50,000. Profit before charging depreciation is Rs.30,000. Calculate the unabsorbed depreciation? Solution: Profit before charging depreciation-30,000 Less: Depreciation Unabsorbed depreciation (50,000) (20,000).

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Basis of charge Principles of Business income Computation of Business income Business deduction/allowances Examples for claiming depreciation Expenditure on scientific Research Practical example of Business income