Depreciation deduction

This query is : Resolved

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)
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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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