Is it necessary / mandatory for a company (whether public or private) to charge depreciation as per schedule XIV of the companies act, 1956 or it can charge depreciation as per section 32 of the Income Tax Act, 1961 in the Financial Statements ?
08 August 2009
The rates contained in schedule XIV should be viewed as the minimum rates. However, if on the basis of bona fide technological evaluation,higher rates of depreciation are justified, they may be provided with proper disclosure by way of note forming part of annual accounts.
Ref:- 1)Circular no 2 of 1989 dated 07/3/1989. 2)Note no 5(ii) to schedule XIV.
In view of the above Schedule XIV rates are not mandatory.
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