Amit Kothari (Article Assistant/ PCC Student) (177 Points)
30 March 2010hello guys
i have a doubt is charging of depreciation as per Companies Act as per usage of 6 months or more or as per days? or we can choose any of the two methods
Kaushik Vankadkar
(Service)
(350 Points)
Replied 30 March 2010
As per comapnies act depreciation is calculated as per pro rata basis. In income tax there is more and less than 6months. However a company can even chose to provide depreciation for full year but neccessary disclosure to be made in notes forming accounts.
regards
kaushik
CA KHAN AURANGZAIB
(ERP FINANCIAL CONSULTANT)
(85 Points)
Replied 30 March 2010
As per company act depreciation will be charges on pro-rata basis. hence calculate depreciation for the days actual used, not on less or more than 6 month basis.
Amit Kothari
(Article Assistant/ PCC Student)
(177 Points)
Replied 30 March 2010
so should i go for the days basis ? complying the Income Tax Act? coz one of my senior has not provided any depreciation coz all assets are purchased on or after January being a new company! so shall i provide Depreciation ?
CA KHAN AURANGZAIB
(ERP FINANCIAL CONSULTANT)
(85 Points)
Replied 30 March 2010
definitely you calculate on prorata basis.
CA Rahul Jain
(CA)
(1162 Points)
Replied 30 March 2010
@ Amit.
Depreciation has to be provided on pro-rata basis. but if the assets are not 'put to use', there is no need to provide depreciation.....
Amit Kothari
(Article Assistant/ PCC Student)
(177 Points)
Replied 31 March 2010
ok guys i got it
for example if the asset is purchased on march 1st
for rs 2000
Furniture
then calculations will be : 2000*30/360*18.10/100 = 30.17
now doubt is should the days be 360 or 365 and the date here is 1 st march so am not counting that day and taking only remaining 30 days for the period upto 31-3
so are my assumptions correct?
Aditya
(Working)
(21 Points)
Replied 31 March 2010
No amit you should consider the day of purchase also....so the calculation will be....
2000*31/365*18.10/100 = 30.745 
ANWAR
(CA Final Sudent)
(95 Points)
Replied 14 September 2010
as per companies act
Depreciation will b provided on day basis
and as per Income tax act
Depreciation wil b calculated
on 6 Monthly basis
if Asset is put to use more than 180 days then full deprciation will b provided
if asset is used less than 180 days then only half depreciation will b provided
Biswajit Mishra
(SENIOR AUDIT MANAGER)
(27 Points)
Replied 10 August 2012
Dear friend,
could you please give me the exact section or bare act or whatever regarding depreciation should be taken as per day basis, i am little confused.
CAclubindia
