Depreciation

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VINITHA RAJESH (Querist)
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25 January 2012 Hi,

A company has bought lot of books for their reference. 50% of them are subject books which will be used for the development of the business and the balance 50% are management books which will be kept in the library of the company.

Can the subject books be treated as asset?

As per IT Act, depreciation rate for such books is 60%, but Companies Act do not specify the rate.

Can the books to be kept in library be written off as expenses.

Please advice and give comments.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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25 January 2012 Subject as well as library books are to be treated as revenue expenditure. Capitalization of books for the purpose of income tax is applicable in the case of 'profession'only.
Ps:- An incorporate body (company) can't do profession.

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