Is depreciation allowable on purchase of fixed assets by cash, Which used for bussiness purpose?

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 Yes!, depreciation is allowable on purchase of asset for business purpose by cash, subject to certain conditions. The asset must be used for the business or profession of the assessee, and it must be owned, wholly or partly, by the assessee. The asset must also have a useful life of more than one year. However, there is a restriction on claiming depreciation on assets purchased in cash. Section 43 of the Income Tax Act, 1961, disallows the capital expenditure incurred in cash for certain specified assets, including fixed assets. This means that if you purchase an asset for your business in cash, you will not be able to claim depreciation on the cost of the asset. There are a few exceptions to this rule. For example, you will still be able to claim depreciation on assets purchased in cash if the amount of the expenditure does not exceed Rs. 20,000. You will also be able to claim depreciation on assets purchased in cash if the asset is used for scientific research or for the purpos...
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What is Mutual Fund? And how does it work?

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 Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities, such as stocks, bonds, or a combination of both. They are managed by professional fund managers who make investment decisions on behalf of the investors.

Here's how mutual funds generally work:

  • Fund Creation: A mutual fund is created by an asset management company (AMC) that designs the fund's investment objective, strategy, and guidelines. These details are outlined in a document called the prospectus.
  • Investor Contributions: Investors purchase units or shares of the mutual fund by investing a certain amount of money. The price of each unit is determined by the net asset value (NAV) of the fund, which is calculated by dividing the total value of the fund's assets by the number of units outstanding.
  • Portfolio Management: The fund manager, along with a team of analysts, researches and selects securities that align with the fund's investment objective. The fund's portfolio may include a mix of stocks, bonds, cash, or other assets, depending on the fund's strategy.
  • Diversification: Mutual funds pool money from various investors, allowing them to create a diversified portfolio. This diversification helps spread the investment risk across different securities, reducing the impact of any single investment's performance.
  • Ongoing Management: The fund manager monitors the portfolio, making buying or selling decisions based on market conditions, economic trends, and the fund's investment objectives. They aim to maximize returns while managing risk.
  • Shareholder Services: Mutual funds typically offer services such as customer support, account statements, and regular updates to shareholders. Investors may also have the option to reinvest dividends or distributions back into the fund.
  • Valuation and Pricing: The NAV of a mutual fund is calculated at the end of each trading day. It represents the total value of the fund's assets minus any liabilities, divided by the number of outstanding units. The NAV per unit determines the price at which investors can buy or sell shares.
  • Buying and Selling: Mutual fund investors can buy or sell units on any business day at the NAV price. Investors can typically choose between two types of mutual fund transactions: lump-sum investments or systematic investment plans (SIPs) that allow regular investments over time.
  • Costs and Fees: Mutual funds charge various fees, including management fees, administrative expenses, and distribution charges. These costs are usually disclosed in the fund's prospectus and impact the overall returns for investors.


It's important to note that mutual funds come in different types, such as equity funds, bond funds, index funds, sector funds, etc. Each type has its own investment focus and risk level. Investors should carefully consider their investment goals, risk tolerance, and investment horizon when selecting mutual funds.


Before investing in mutual funds, it's recommended to review the fund's prospectus, consider historical performance, and assess the reputation and track record of the asset management company. Additionally, consulting with a financial advisor can provide personalized guidance based on individual circumstances.

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