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      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%).

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