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Deprecation as per Companies Act.

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(Querist)
23 May 2010 Our client being a Pvt. Ltd. Co.has purchased textile machine of worth Rs.35 Lacs on 08.06.2009 & same put to use on 01.07.2009.Later on received Tuf subsidy on the above machinery of Rs.6 lacs on 12.01.2010.

Now our query is (i) What will be treatment of the above transactions in books of A/c & (ii) How much Depreciation will be recorded in Books as per Companies Act as well as as per I.T.Act.

Please reply urgently.

Thanks in Advance.

Ankur Baheti
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CA. B.SRINIVASULU

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CA. B.SRINIVASULU (Expert)
24 May 2010 The net cost of the machine will be Rs.35 Lacs - subsidy of Rs.6 Lakhs.

You have to provide depreciation on 29 lakhs for the machinery under companies act form 1-7-2009 and claim full year depreciation on 29 lacs for income tax purposes.
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