Depreciation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 September 2014 Is company allowed to charge dep. as per companies act. I mean is there no compulsory provision to charge dep as per IT act 1961 also and make an adjustment of Deferred tax.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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01 September 2014 u need to follow co act only and only for income tax u need to take it act

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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01 September 2014 1. It is mandatory for companies to charge depreciation as per Companies Act
2. It is also mandatory for Companies to follow AS 22 and calculate timing difference resulting in deferred tax asset or liability.

Querist : Anonymous

Querist : Anonymous (Querist)

01 September 2014 i mean sir while tax auditing can we only provide dep as companies act, ignoring IT act dep. and their respective DTA\DTL effect. plz suggest me the solution.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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01 September 2014 Tax audit is governed by Section 44AB of the Income Tax Act.
so it is mandatory to compute depreciation as per Income Tax Act because income under the head PGBP is computed as per the provisions of Section 28 to 44D
Section 32 provides deduction of depreciation.
so you have to disallow depreciation as per companies act & allow depreciation as per Income Tax Act

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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01 September 2014 no, while doing tax audit only depn as per it act is allowed and not as per co act.