08 December 2009
I want a depreciation Rates for 2009-10. This rate is charged on Income tax act or Companies Act? I think Income tax Act Its correct or not?
08 December 2009
Depreciation rates are different in Companies Act and Income-Tax Act.
For true and fair view of the financial statements; generally the rates specified in the Companies Act is taken. If the useful life is different as per the management; they can charges depreciation accordingly. However; this will be shown in notes on accounts.
Income-Tax allows different rates for which you can refer Ready Reckoner. Additional depreciation is also allowed in case new plant and machinery etc. have been installed.
Hope your concept is clear. For Rates of Depreciation you have to refer Companies Act for accounting purpose and Ready Reckoner for Income Tax Purpose.
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