05 August 2012
During audit of a pvt company, I have found client is charging depreciation as per income tax instead of companies act in its books of account.
My Question is as whether it is possible to follow income tax depreciation rate instead of companies act depreciation rate.
whether it is optional to charge depreciation as per income tax or companies act in the books of accounts. yes, income tax rates is considered at the time of calculating depreciation.
06 August 2012
Section 349 (detrmination of net profit) and Section 350 (Ascertainment of depreciation) do not apply to a private company unless it is a subsidiary of a public company.
Schedule XIV rates are prescribed in section 350. Thus a private company may follow any other rate.
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