📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Under the Income Tax Act, which of the following

    correctly applies to depreciation under Section 32 for a business asset used in manufacturing?
    A 10% depreciation on land and building used in business Correct Answer Incorrect Answer
    B 15% depreciation on plant and machinery under written down value method Correct Answer Incorrect Answer
    C Goodwill is eligible for depreciation under intangible assets Correct Answer Incorrect Answer
    D Depreciation is allowed only under straight line method Correct Answer Incorrect Answer
    E Intangible assets depreciated at 10% on WDV basis Correct Answer Incorrect Answer

    Solution

    • Section 32 allows depreciation on tangible and intangible assets used in business/profession. • Plant and Machinery (used in manufacturing) gets 15% depreciation under the Written Down Value (WDV) method. • Straight Line Method (SLM) is permitted only for power generation undertakings. • Land is not eligible for depreciation. Buildings (factory) get 10% WDV. • Goodwill is not eligible for depreciation post Finance Act 2021. • Intangible assets (like patents, trademarks) are eligible for 25% depreciation (not 10%).

    Practice Next
    More Previous year papers Questions
    ask-question