LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

If 44ae is adpoted where to show dep in books of account

Bibhuti ranjan (student) (36 Points)

25 August 2016

IF 44AE IS ADPOTED THEN WHERE TO SHOW DEPRECIATION IN BOOKS OF ACCOUNT

WHAT ABOUT THE TREATMENT OF DEPRECIATION FOR PREPARETION OF BALANCE SHEET PURPOSE

PLS REPLY IT'S URGENT

THANKS IN ADVANCE

Reply
Follow
Share

4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 25 August 2016

As such books of accounts are not required for presumptive income u/s. 44AE.

Secondly, the income so declared (8% or more) is after taking into the effect after depriciation.

So, the WDV of any depreciable assets will be calculated as per the applicable depreciation rate

1 Like

monika (audit assitent) (459 Points)
Replied 25 August 2016

SIR JI I AM CONFUSED

is depr. allow if we choose option of 44AD with declere 8% profit ?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 25 August 2016

@ monika ::

Depreciation is compulsorily allowed. What I mean is the profits declared u/s. 44AD, is presumed to be derived after effects of depreciation. No more depreciation allowed after the declared income u/s. 44AD.

S M Gala (Head: F & A) (93 Points)
Replied 28 August 2016

Declaring taxable income @ 8% or more profit u/s 44AD is "Notional" figure, one can say. Its only for tax calculation & not for books of accounts. So the depreciation always be calculated @ rates prescribed u/s 32 & the book value (WDV) be maintained accodringly. Because, in next F.Y. if income as per books exceeds 8% say, then depreciation be allowed at the WDV as on 1st april of that year and not the receeding year when you opted for 44AD. So providing Depreciation at rates prescribed in Sec 32 is advisable to maintain opening & closing WDV.