Depreciation

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RAJASEKHAR (Querist)
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14 February 2009 Hi sir/Madam,

what are the conditions In Accounts and Income Tax to charge the Depreciation On Fixed Assets and what is the treatment of charging the Depreciation in both Accounts and income tax?

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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02 March 2009 in accounts :

as per A/S -6 :
depreciation is charged on depreciable assets : those assets are :

which are expected to be used for more than one accounting period, have a limited useful life, and are held for use in production of goods and services (i.e. not intended to sale).

depreciation is debited to the profit and loss account and credit to the asset account or depreciation fund account.

in income tax :

section 32 deals with depreciation :

inorder to avail depreciation following conditions should be satisfied :

asset must be owned by the assessee, it must be used for the purpose of business or profession, used during the previous year and it may be tangible or intangible assets.

the block of assets method is used to calculate the amount of depreciation in income tax. the amount of depreciation calculated is considered as an allowable deduction in the profit and loss account to bring the taxable income.

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