1. Is a Lessee entitled to claim depreciation on the cost of building constructed by him for business-use in the space taken on long lease say on 9 years lease?
2. A Pvt Ltd company got land allotted for say 20 lacs, constructed a building costing 35 lacs, will it be entitled to claim depreciation on 55 lacs. I think yes because the total asset is now one.
Lessee Can Claim Depreciation on Building Costs, Not Land; Asset Value Excludes Land Cost for Depreciation. A user inquired about whether a lessee can claim depreciation on a building constructed for business purposes on leased land and if a private company can claim depreciation on both land and building costs combined. The response clarified that depreciation can be claimed on the building's construction cost but not on the land. The total asset value for depreciation purposes should only include the building cost, not the combined cost of land and building. (AI Summary)
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