AS PER INCOME TAX WE PROVIDE DEPRECIATIN ON ASSETS AS PER IT RULES BUT I WANT TO KNOW HOW IT WILL BE MAINTAINED IN
1. COMPANY
2. SOLE PROPRIETOR & PARTNERSHIP FIRM
THE RULE OF BLOCK OF ASSETS WILL APPLY IN MAINTAINING P&L A/C OR NOT
6 Replies
Naina
(CA Student)
(477 Points)
Replied 21 February 2009
The same ques. I wanted to know. Will two separate books of a/cs be maintained even by small businessman - one for IT rules and other according to accounting standards?
suneet
(CA FINAL)
(421 Points)
Replied 21 February 2009
I AM NOT CONFIRM BUT "a" MAY PROVIDE DEPRECIATION AS PER IT RULES OR DO JUST NORMALY.
CA.Tarun Maheshwari
(CA, DISA)
(7150 Points)
Replied 21 February 2009
Dear Suneet and Naina, There is no need to keep two books in case of any assessee. In case of company, we provide depreciation in books as per the companies Act and at the time of computation of total profit of the company as per Income tax, we just add back the depreciation as per companies act and reduce the depreciation as per Income tax Act. Yes, we need to make two different depreciation schdules, one as per companies act and another as per IT Act.
CA.Tarun Maheshwari
(CA, DISA)
(7150 Points)
Replied 21 February 2009
And In case of proprietorship and partnerships, there is no need to follow the Companies Act, so we just provide depreciation as per Income Tax itself in the books, so no need of such type of adjustment at the time making computation of total profit.
CA Sakshi
(CA Practice)
(309 Points)
Replied 21 February 2009
The assessee means Income tax payers is at his/her option is free to maintain Fixed assets Accounts on regular basis of accounting method employed by it. Only while computing Income tax you have to apply IT rates of depreciation. The assessee must keep in record the last depreciation chart as per Income tax to get the opening balance of assets as per Income tax. These are not entered in Books of Account means not to be mixed with books of accounts. I hope you get it.
suneet
(CA FINAL)
(421 Points)
Replied 21 February 2009
THANKS SIR
PLEASE SOLVE MY ANOTHER QUERY TITLED "PLEASE HELP "
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