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Depreciation rate??

Nirav (Accountant) (595 Points)

27 August 2011

Hello,

Please tell me the rate of Depreciation on Software according to Company's Act and Incometax Act.

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7 Replies

Manika Venkata Siva Prasad (IPCC-student) (84 Points)
Replied 27 August 2011

Income Tax Act - WDV Method - 60%

Companies Act - WDV - 40% & SLM - 16.21%

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Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 27 August 2011

In ma opinion, the rate as per income tax act is correctly answered by Manika

but for accounting purpose, i thnk for software, AS-26 is applied........

(i.e to be amortised in 3-5 years).............

plz correct me if m wrng..........

amit jain (Chartered Accountant) (532 Points)
Replied 27 August 2011

Rate as per income tax is 60%

As per companies act 40% (wdv)

16.21% (slm)

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 27 August 2011

But in schedule XIV, isnt dat for Computer???????

and not for software?????/

CA. Anubhav Jaggi (CA) (104 Points)
Replied 27 August 2011

I agree with CA. Sumit.

As per I.T Act, the rate is 60%. But as per companies act, the rate of 40% is applicable if software is installed in computer and necessary for its operation.

But if software is purchased idependently (Application software), AS-26 (Intangible Assets) is applicable.

Correct me if I am wrong.

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Sushmita (CA-Final(Intern)) (262 Points)
Replied 28 August 2011

Originally posted by : Anubhav
	I agree with CA. Sumit. As per I.T Act, the rate is 60%. But as per companies act, the rate of 40% is applicable if software is installed in computer and necessary for its operation. But if software is purchased idependently (Application software), AS-26 (Intangible Assets) is applicable. Correct me if I am wrong.