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Dep. as per IT & Companies Act

Going...to be C.A soon...

Dear All

As we know we will charge depreciation in books as per companies act and also as per income tax act!

Pl. suggest me on the following example

Assets name say computer (dep rate say 60% as per companies act) & (dep rate say 40% as per income tax act)

Assets WDV say Rs. 50,000/-

if we booked dep. on 31st march' 2010: depreciation a/c Dr. 30K

Assets Cr. 30K

now assets balance ladger would remain by Rs. 20Kb

but income tax dept. will allow only Rs. 20k as depreciation claim then what is the accounting entry for Rs. 30k-20k=10k??

Thanks!

 

 
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Assets WDV say Rs. 50,000/-

if we booked dep. on 31st march' 2010: depreciation a/c Dr. 30K

Assets Cr. 30K

now assets balance ladger would remain by Rs. 20Kb”, Mr Kumar up to this point nothing is disputed.   

 

What do you wish us to understand from your following lines :

“but income tax dept. will allow only Rs. 20k as depreciation claim then what is the accounting entry for Rs. 30k-20k=10k??”

 

Calculations of Depreciation as per Income Tax is carried on only for the computation of INCOME TAX RETURNS.    Yourgoodself may be aware of this point  that no entry regarding this (Calculations of Depreciation as per Income Tax ) will factor in the Books of Accounts.  

 

 
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Going...to be C.A soon...

Sir Thanks for helping me

i was unaware of the thing but now got cleared!

 
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In books of account we are calculating and accounting depreciation based on comapny accounts.

The income tax rates are applicable only for computiation of return and no way affects books f accounts.

 
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how to calculate deffer tax laibilities from Dep. as per co. act and as per income tax act

 

 
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