Question

Which method of depreciation is Recognition by Income Tax Law ?

• A. Straight line method
• B. Written down value method
• C. Both
• D. None

Answer 1

The correct option is B Written down value method

Depreciation is the permanent and continuous decrease in the book value of a depreciable fixed asset due to use, effluxion of time, obsolescence, expiration of legal rights or any other cause.

There are different methods of calculating depreciation. The Income Tax Act recognize written down value of depreciating asset except for undertaking engaged in generation and generation and distribution of power.