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Depreciation rate

Sandeep Shirke (Accounts Executive) (118 Points)

03 July 2014

Dear Sir/Madam, I have one query about depreciation rate. Are there difference in depreciation rate applicable to the income tax and companies act? If yes,then please explain me in brief and also rate for the both income tax and companies act. Thanks.

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4 Replies

Vishwajeet Dixit (CA Practice) (21 Points)
Replied 03 July 2014

Yes the rates for Depreciation are different in Companies Act and Income Tax Act. The companies i.e. Pvt Ltd and/or Public Ltd. needs to provide Depreciation as per the rates specified in Companies Act, whereas all other concerns like HUF, Propeirtorship, Partnership etc needs to provide Depreciation as per Income Tax Act.

For rates you can check the attached sheet

Attached File : 1269684 1333851 depr rates.xlsx downloaded: 342 times

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JAINENDRA JAIN (ACS/CA) (1668 Points)
Replied 03 July 2014

yes depreciation rate is different from companies act and income tax act.

rates for companies act : https://www.mca.gov.in/Ministry/latestnews/Explanatory_Statement_alongwith_Schedule_XIV_4dec2008.pdf

rates for income tax : https://www.accounting-n-taxation.com/Depreciation-Rates.H T M L

after charging depreciation cxalculate deferred tac as per as-22.

Sandeep Shirke (Accounts Executive) (118 Points)
Replied 03 July 2014

Thanks a lot Sir......

VIKASH KUMAR JAIN (Audit Executive) (711 Points)
Replied 06 July 2014

Depreciation as per companies act is used for books of accounts of company.However, While companies filling ITR by using depreciation as per IT act.Timing difference occurs, which is known as DTA or DTL for future adjustment.