Depreciation rates
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 May 2017
Why depreciation rates differ in income tax and companies act
30 May 2017
The purpose is different for cal of dep under respective act.
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 May 2017
could you plz elobrate
30 May 2017
Depreciation for companies to be deducted as per depreciation governed by companies Act.2013
For computing tax depreciation to be calculated at the rates prevailing in Income-tax Act. Under Income Tax Act 1961, depreciation on assets is governed by section 32. It is allowed as an expense to the owner of the asset while arriving at income under the head of Income from business and profession, from the year in which asset is put to use for the first time and is calculated on the basis of block of assets. The provisions relating to charging of depreciation in the said section states that depreciation for every year should be calculated on the Written Down Value (WDV) of the block of assets at the rates specified in the income tax act in that regard. It also specifies how to arrive at the figure of WDV for the purpose of charging depreciation. It further provides that, if in the year when the asset is first time put to use, it is used for less than 180 days, depreciation will be an amount equal to 50% of the depreciation calculated using normal rates given in the act.
For computing tax depreciation to be calculated at the rates prevailing in Income-tax Act. Under Income Tax Act 1961, depreciation on assets is governed by section 32. It is allowed as an expense to the owner of the asset while arriving at income under the head of Income from business and profession, from the year in which asset is put to use for the first time and is calculated on the basis of block of assets. The provisions relating to charging of depreciation in the said section states that depreciation for every year should be calculated on the Written Down Value (WDV) of the block of assets at the rates specified in the income tax act in that regard. It also specifies how to arrive at the figure of WDV for the purpose of charging depreciation. It further provides that, if in the year when the asset is first time put to use, it is used for less than 180 days, depreciation will be an amount equal to 50% of the depreciation calculated using normal rates given in the act.
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