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Income Tax Act prescribes which method for most assets?
ADiminishing (WDV) method
BStraight line method
CSum of years digits
DUnits of production method
Answer & Solution
Correct answer: A. Diminishing (WDV) method
1. The Income Tax Rules generally allow WDV/diminishing balance method for depreciation.
2. SLM is permitted only for assets of power-generation/distribution undertakings.
3. Hence WDV is the default for tax computation.
_Source: ICAI BoS Foundation Paper 1, Ch 5 "Depreciation & Amortisation", §3 intro ¶2_
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