Rates of depreciation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 October 2013 A Private Limited Company is charging depreciation as per Income Tax Act, 1961 in its books of accounts since its inception as per policy adopted by the Company.
1. Whether it is mandatory to charge depreciation as per rates of Companies Act or the Company may charge the depreciation as per alternate rates.
2. If mandatory to follow the Companies Act rates, then what are the implications.
3. If no, what are the disclosure requirements in the financial statements of the Company.

Arun Biyani

Arun Biyani (Expert)
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08 October 2013 yes its compulsory for companies private and public both to charge depreciation according to Schedule XIV of the Companies Act, 1956.

Ganeshbabu K

Ganeshbabu K (Expert)
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08 October 2013 It is mandatory to follow minimum rates prescribed in Schedule XIV
.
.
higher rates can be done with some basis

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Ganeshbabu K

Ganeshbabu K (Expert)
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08 October 2013 find attached file

https://caclubindia.s3.amazonaws.com/cdn/files0512/831581_50830_depreciationrates_as_per_co_act.pdf

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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08 October 2013 i) Schedule XIV rates are not mandatory. Company can adopt a rate which is more than the principal rates as in that schedule. Please see note 5 in http://www.mca.gov.in/Ministry/latestnews/Explanatory_Statement_alongwith_Schedule_XIV_4dec2008.pdf

ii) Disclosure as in note-5, referred above, and AS-6 has to be made in the notes attached to the financial statements.

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