Depreciation
This query is : Resolved
29 December 2012
sir,
is depreciation mandatory under compaines act like in income tax act???
is depreciation mandatory under compaines act like in income tax act???
29 December 2012
Charging depreciation to P & L account is not mandatory as per companies act.
But before declaring dividend provision for depreciation must be taken into account (section 205)
But before declaring dividend provision for depreciation must be taken into account (section 205)
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29 December 2012
sir if in a pvt ltd company asset is sold during the year.. and depreciation is not charged as per co. act.. (for saving tax liability) because as per income tax act we can not claim depreciation as it does not exist on 31st march..
what are the consequences ?? and no dividen is proposed during the year
what are the consequences ?? and no dividen is proposed during the year
29 December 2012
sir,
for example :-
NET BLOCK OF COMPUTER AS ON 1-4-2011 IS RS 100000
AND SOLD ON 30TH MARCH 2012
NOW AS PER CO. ACT WE CAN CLAIM DEPRECIATION ON THIS COMPUTER = 40%*100000*365/366 =39891
BUT WE CAN NOT CLAIM DEP. UNDER INCOME TAX ACT.. BECAUSE IT DOES NOT EXIST ON 31ST MARCH
AND IN COMPUTIN TAX LIABILITY
WE ADD DEP. AS PER CO. ACT IN GROSS TOTAL INCOME AND DEDUCT DEP AS PER INCOME TAX ACT ?
AND DEFFERED TAX ASSET REMAINS IN B/S..
for example :-
NET BLOCK OF COMPUTER AS ON 1-4-2011 IS RS 100000
AND SOLD ON 30TH MARCH 2012
NOW AS PER CO. ACT WE CAN CLAIM DEPRECIATION ON THIS COMPUTER = 40%*100000*365/366 =39891
BUT WE CAN NOT CLAIM DEP. UNDER INCOME TAX ACT.. BECAUSE IT DOES NOT EXIST ON 31ST MARCH
AND IN COMPUTIN TAX LIABILITY
WE ADD DEP. AS PER CO. ACT IN GROSS TOTAL INCOME AND DEDUCT DEP AS PER INCOME TAX ACT ?
AND DEFFERED TAX ASSET REMAINS IN B/S..
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