Depreciation

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Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2014 Whether Depreciation can be claimed more than the income tax depreciation rates

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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19 December 2014 if u are asking for income tax then no

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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20 December 2014 Agree with Mr. Sampat, no way to claim Higher rate of depreciation as against rate of depreciation mentioned under income tax rules

Querist : Anonymous

Querist : Anonymous (Querist)

20 December 2014 i heard that MAT came because of excess calculation of depreciation by big companies is it true? if not what the use of mat for govt to get it implement

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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20 December 2014 Mat is totally seperate issue and depreication is allowance of non cash expenditure as per prescribed % under income tax act.

Querist : Anonymous

Querist : Anonymous (Querist)

20 December 2014 i heard that MAT came because of excess calculation of depreciation by big companies is it true? if not what the use of mat for govt to get it implement

Querist : Anonymous

Querist : Anonymous (Querist)

20 December 2014 then can you explain the reasons mat came in

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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20 December 2014 it is because for body coporate there was no proper structure of taxation and they were earlier put to higher tax bracket which was not fair taxation policy.

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Ganeshbabu K

Ganeshbabu K (Expert)
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20 December 2014 Yes it is possible that some cases company needs to pay MAT.

In many cases we see company will have book profit but no taxable income due to many reasons say,deductions,exemptions,allowances.

One of the reason is depreciation,
Yes,even though company have book profit they may not pay tax as they will not have adequate taxable income to pay tax because higher rate of depreciation as per IT act compared to company act or it may be because of additional depreciation.

So inorder to avoid this IT act introduces MAT u/s Sec.115jB
.
Under the provisions of Section 115JB, where the income tax calculated under the income tax act is less than 18.5 % of the book profit, then such book profit shall be deemed to the total income of the
assessee and tax payable by the assessee shall be 18.5 % on book profits.

Just study 115JB to understand more on this topic