Mr. Piyush runs a sole proprietorship firm and owns four machines which was put in use for business in March, 2022. The depreciation on these…

(i) Computation of depreciation for A.Y.2024-25 Particulars ₹ W.D.V. of the block as on 1.4.2023 7,70,000 Add: Purchase of second hand plant during the year [in December, 2023] 6,10,000 13,80,000 Less: Sale consideration of old machinery during the year [in July, 2023] 10,00,000 W.D.V of the block as on 31.03.2024 3,80,000 Depreciation @ 15% but restricted to 50% thereon. 3,80,000 X 7.5% 28,500 [Since the value of the block as on 31.3.2024 represents part of actual cost of second hand plant purchased in December, 2023, which has been put to use for less than 180 days, depreciation is restricted to 50% of the prescribed percentage of 15% i.e. depreciation is restricted to 7.5%. Therefore, the depreciation allowable for the year is 28,500 being 7.5% of 3,80,000] (ii) Capital gains liable to tax In the given case, no capital gains would arise, since the block of asset continues to exist, and some of the assets are sold for a price which is lesser than the written down value of the block as increased by the actual cost of asset purchased during the year (iii) Computation of deduction allowable under section 35 Particulars Amount (in lakhs) Section % of weighted deduction Amount of deduction (in lakhs) Payment for scientific research UV University, an approved University 15 35(1)(ii) 100% 15 Satyawati College [Since it is not mentioned as an approved University] 17 - NIL NIL