DEPRECIATION

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sandeep sahu (Querist)
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23 November 2010 Is charging of depreciation mandatory under the comanies act and income tax act on the assets used in a project yet to commence commercial production ?

CA. Aryendra

CA. Aryendra (Expert)
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24 November 2010 Firstly, it is mandatory for every company to provide for depreciation in the books of account before declaring dividend.

Income Tax:

As per explanation 5 of section 32: Deprciation provision sahll apply, whether or not assessee has claimed the deduction in respect of depreciation in computing his total income.

sandeep sahu

sandeep sahu (Querist)
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25 November 2010 Dear sir
I aked this question as it is a project stage and no question of income or dividend. please guide me whether depreciation can be charged to profit and loss account or not.

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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18 December 2010 Depreciation is to be charged only when assets put to used.

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