06 December 2007
in schedule xiv no where it is mentioned that company has to depreciate its assets upto 95%. then how a company can depreciate its assets upto 95% following schedule xiv rates?
IT IS SECTION 205 ,SUB SEC 2, CLAUSE (b) WHICH TALKS ABOUT ARRIVING AT DEPRECIATION BY DIVIDING 95% OF ORIGINAL COST OF AN ASSET BY THE SPECIFIC PERIOD ( MEANS NO. OF YEARS AT THE END OF WHICH ATLEAST 95% OF ORIGINAL COST OF THE ASSET WILL HAVE BEEN PROVIDED BY WAY OF DEP.AS PER CLAUSE (a)SUB SEC. 5 of sec 205) IN RESPECT OF SUCH AN ASSET .
IT IS SECTION 350 WHICH REFERS TO SCH XIV.
so for the purpose of dividend payment and sec 350 --ascertain net profit to calculate managerial remuneration - the relevance of depreciation is determined.
SCH.XIV RATES OF DEP. ARE MINIMUM STATED. NO BAR IF A COMPANY WISHES TO CHARGE MORE DEP. R.V.RAO
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