Accelerated depreciation

[seetha lakshmi]

Can the school use accelerated rate of depreciation for some of its assets - computer and accessories as the school replaces them every three years. Traditionally school has adopted the wdv rates as prescribed under Income tax act for all its assets.

[Rama Krishana]

No assessee or school can opt for rates of depreciation as per its whims - the rates of depreciation have been provided under the income tax - on computers it is 60%. Once you go for WDV method of depreciation, there is no question of availing depreciation in equal three installment to setoff in three years. As long as block would exist, you may replace the assets any number of times, but depreciation can not be limited to three years.

AI Summary

Depreciation rates must follow prescribed schedules; WDV method prevents limiting depreciation to short replacement cycles.
Depreciation rates must be applied as prescribed; computers attract the prescribed higher rate. Under the Written Down Value (WDV) method, depreciation is computed on the block of assets and cannot be limited to equal installments or a short fixed replacement period even if individual assets are replaced frequently.