What is the tax treatment for the depreciation of fixed assets?
Wear and tear allowances are granted on fixed assets and other capital assets used in the production of income. Except where specifically approved, only the straight-line method of depreciation is allowed. In applying the straight-line depreciation method, one should assume a residual value of not less than 10% of the original cost. Depreciation in fixed assets should be computed starting from the month following that in which the fixed assets are put in use.
