Depreceation as per Income Tax Act

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SHAIKH AIJAZ ABU MIYAN

SHAIKH AIJAZ ABU MIYAN (Querist)
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06 November 2008 Whether it is allowed by the companies to provide the depreceation as per Income Tax Act.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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06 November 2008 The bench mark is the rate as in schedule X1V of the companies act,1956. Companies can provide depreciation in books at a rate which is not less than the rate mentioned in Sch.X1V.

CA Bosu babu

CA Bosu babu (Expert)
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07 November 2008 U hav to follow Cos act rates (not less than what they given)...so check for IT Depn rates whether they are above the cos act depns or not....if more u can proceed with that....

RAMPRASAD

RAMPRASAD (Expert)
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07 November 2008 Even when you adopt Income tax % for Companies books, this will not solve the purpose of maintaining single FA Register. Because under Income tax Act, even when the asset is purchased on the last day of the year, 50% of the Depreciation is allowed. Whereas under Companies you can claim depreciation for one day only.

Hence there will be always a difference between companies books and Income tax books. This being the case, why to go for Income tax rate for Companies books.

However to answer your question straight you can adopt Income Tax rate for Companies Books too. You have to simply state in Notes on Accounts in your Accounting policy about the rates applied.

Hope my reply clarifies your doubt

Regards
Ramprasad

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