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Depreciation deduction

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Querist : Anonymous

Querist : Anonymous (Querist)

26 May 2013 Sir

Can you please explain me difference between WDV / FLAT depreciation method and which method is applicable in pvt. ltd. co

thanks & rgds

mukesh kumar

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

26 May 2013 In Flat rate or Straight Line Method the fixed amount Depreciation is provided during the specified period (or say, life time)of the asset. Whereas in WDV method a fixed percentage is applied on the opening WDV, or, in case of newly purchased asset, on the cost of the asset.
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In WDV method Depreciation is higher in the initial years and as the WDV reduces it also reduces accordingly.
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Any method can be applied in a PVT Ltd Co.
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For rates of Depreciation you may refer Schedule XIV to the Companies Act. Also refer Section 205 and Section 350.
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