Which of the following methods of depreciation is prescribed by the Income Tax Act, 1961?
Written-down value method
The correct answer is option 2. The Income Tax Act, 1961 prescribes the Written-down value (WDV) method for calculating depreciation. Under this method, depreciation is calculated on the written-down value of the asset at the beginning of each year, and the depreciation amount decreases over time. The other methods listed are not specified by the Income Tax Act for tax purposes.
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Important Questions from Depreciation, Reserve & Provision
Which of the following statement is FALSE in relation to the term depreciation?
________ refers to writing off the cost of intangible assets like patents, copyrights, trademarks, franchises, and goodwill which have utility for a specified period of time.
Which of the following statement is FALSE?
Which of the following statement is NOT TRUE in regard to reserve and provision?
Provision is _______ against profit.
