Deduction for terminal allowance
38. (1) A person shall be allowed a terminal allowance in respect of a block of asset if,-
(a) the block of assets have ceased to exist by reason of being demolished, destroyed, discarded or transferred during the financial year; and
(b) the percentage specified in the Fifteenth Schedule for computing depreciation in respect of the block is zero.
(2) The terminal allowance referred to in sub-section (1) shall be computed in accordance with the formula -
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A + B / C |
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Where |
A |
= |
the written down value of the block of asset at the beginning of the financial year; |
|
|
B |
= |
the actual cost of any asset falling within that block, acquired during the financial year; and |
|
|
C |
= |
the amount accrued or received in respect of the assets which are demolised, destroyed, discarded or transferred during the financial year together with the value of the carcass or the scrap, if any. |
(3) The terminal allowance referred to in sub-section (1) shall be treated as 'nil', if the net result of the computation, thereunder, is negative.
