Can anybody tell me on which basis we can consider certain % on fixed assets for depreciation
6 Replies
ayush
(ARTICLE ASSISTANT)
(39 Points)
Replied 19 August 2011
it is based on the schedule IV of companies act
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 19 August 2011
FOR INCOME TAX PURPOSES RATES R GIVEN IN ACT
mounika
(semi qualified chartered accountant)
(981 Points)
Replied 19 August 2011
it depends on somany reasons. for income tax purpose rates r mentioned in d act itself. generally company considers such rates only. such rate depends on someother factors such rate, usage. life period of asset. salvage value etc
Yogesh
(Manager)
(50 Points)
Replied 23 August 2011
I differ with above. The depreciation under the Companies Act are under schedule XIV of the Companies Act 1956, which are the minimum rates. The Company can chose to have more than schedule XIV rates basis useful life assessed by the management. Under income tax, rates are different and it is mandatory to follow those rate. The difference in income tax rate and companies act rates gives rise to deferred tax and the same is accounted as per AS 22.
Hemanth Sai
(CA-FINAL,AUDIT TRAINEE)
(110 Points)
Replied 10 September 2011
A company has to provide depreciation as per schedule VI of companies act.It can provide more than specified in sch-Vi but not less..
but when it comes to prep of IT returns and computation u need to calculate the depreciation rates as per IT act just for computation purpose but u should not follow the IT depreciation rates in the books of a/c's
But in the case of some assets the IT depreciation rates are higher than sch-VI rates in that case both the conditions are satisfied.
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