depriciation

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CA Sanjeev Kr Jain (Querist)
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14 June 2008 A privated limited company not carrying any business activity has let out its building on rent. If the company is liable to provide depriciation under companies act or not, because under income tax the rent will be assessed under income from house property and against this head no claim for the depriciation will be admissible. But due to providing depriciation under companies act the value of the property will be depriciating every year.

Also guide in either of the situation if any provision for the deferred tax / liability is to be provided.

Thanks

Guest

Guest (Expert)

07 October 2009 Company Law and Income Tax both are different from each other.

Income tax calculates the total taxable Income while company law is regulatory code for the company.

Under the companies act, 1956, depreciation provision is compulsory.

So, that your company has to provide the depreciation compulsory.

And depreciation doesnt have any relation with diminishing value of property. As One day the value of the property will be Zero in books of account.