depreciation diff

Rahul Lambe (Sr. Accounts Executive) (35 Points)

07 October 2009  

HI;

 

WHY THERE IS A DIFFERENCE IN FINANCIAL BOOK DEPRECIATION AND INCOME TAX RETURN,

A LIFE OF MACHINARY IS 10 YEARS AND SCRAP VALUE IS 50,000.00 PURCHASE VALUE 8,00,000.00 AS ON 01.01.2005

 

THEREFORE, I HAVE CALCULATED DEPRECIATION FOR MACHINARY AS:

750, 0000/10 = 75,000.00 P.A ($ 6,250.00 P.M)

BUT AS PER 2008 RETURN FILE THE DEPRECIATION AMOUNT OF MACHINARY IS ONLY 53,500.00 FOR 2008

 

CAN ANYONE PLEASE EXPLAIN AND HELP ME ON THIS?

ALSO, WHICH AMOUNT OF DEPRECIATION I SHOULD SHOW IN MY BOOKS OF ACCOUNTS?