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Question
According to the Income Tax Act, which method of charging depreciation is provided?
According to the Income Tax Act, which method of charging depreciation is provided?
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Solution
The correct option is A Reducing Balance Method
Section 32(1) of the Act provides that depreciation is to be
computed at the prescribed percentage on the written down value of the asset
which in turn is calculated with reference to the actual cost of the assets. In
the context of computing depreciation, it is important to understand the
meaning of the term ‘WDV’ & ‘Actual Cost’.
Section 32(1) of the Act provides that depreciation is to be computed at the prescribed percentage on the written down value of the asset which in turn is calculated with reference to the actual cost of the assets. In the context of computing depreciation, it is important to understand the meaning of the term ‘WDV’ & ‘Actual Cost’.
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