Depreciation for Power Generating Undertakings - Section 32(1)(i)

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..... . Written Down value method on block of assets When a depreciable asset (on which depreciation is claimed on straight line basis) of a power generating unit is sold, discarded, demolished or destroyed in a previous year, then TERMINAL DEPRECIATION (in case of loss) is deductible or BALANCING CHARGE (in case of gain) is taxable. Terminal Depreciation or Balancing Charge is calculated as follows Ste .....

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..... Balancing Charge u/s 41(2) and capital gain u/s 50A If the amount calculated under Step II is more than the amount of Step I, then tax treatment of such surplus is as follows: So much of the surplus which is equal to the amount of depreciation already claimed, is taxable as balancing charge u/s 41(2) as business income. The remaining surplus (if any) is taxable under the head Capital Gains Where .....

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