Skip to content

CA Intermediate · Taxation · Profits and Gains of Business or Profession

Meera Textiles, a resident firm, bought a machine on 10 July 2026 for Rs 6,00,000 and put it to use on 1 August 2026. It is plant and machinery in a block with a depreciation rate of 15%. Opening WDV of the block on 1 April 2026 was Rs 4,00,000, and no other additions or sales occurred during the tax year 2026-27. What is the depreciation allowable for the block?

Depreciation is Rs 1,50,000. The new machine was used for more than 180 days, so no half-rate restriction applies. The block value of Rs 10,00,000 (opening Rs 4,00,000 plus addition Rs 6,00,000) is multiplied by 15%.

  1. ARs 1,50,000Correct
  2. BRs 75,000
  3. CRs 60,000
  4. DRs 1,05,000

Explanation

The machine was used for 243 days, which is more than 180 days, so full-rate depreciation applies. Block WDV is 4,00,000 + 6,00,000 = Rs 10,00,000; 15% of that is Rs 1,50,000. Rs 1,05,000 wrongly gives half rate to the new machine alone, and Rs 75,000 applies half rate to the entire block.

Did you get it right without looking?

One question tells you little. A timed set on Profits and Gains of Business or Profession shows your real accuracy, how long you take and where you lose marks.

Practise Profits and Gains of Business or ProfessionFree diagnostic mock

More Profits and Gains of Business or Profession questions