Under Section 32 ITA 1961, DEPRECIATION is allowed as a deduction on:
Answer & Solution
Correct answer: D.
1. Section 32(1) Income Tax Act 1961 allows depreciation on:
2. (a) BUILDINGS, MACHINERY, PLANT, FURNITURE — TANGIBLE assets — owned wholly or partly by the assessee and used for the purpose of business;
3. (b) KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHISES — INTANGIBLE assets (added by Finance Act 2018 for goodwill from FY 2020-21).
4. RATES of depreciation are prescribed in Appendix I to Income Tax Rules 1962.
5. METHODS: Written Down Value (WDV) is the standard; Straight Line Method (SLM) for power generation units.
6. ADDITIONAL DEPRECIATION (20%) on new plant and machinery used in manufacturing/production.
7. Hence option B is correct.
_Source: CS Executive Paper 4 Tax Laws (ICSI BoS) + Income Tax Act 1961 + CGST Act 2017 — Income Tax Act 1961, Section 32_
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