Depreciation method
This query is : Resolved
30 August 2012
hi
Can depreciation calculated at the rates mentioned in the income tax act,1961 while preparing the revised schedule VI?
the depreciation rates as per companies act is different from the income tax act.
In the policies of the companies it is given that they follow the rates as per income tax rules.
so by that can we prepare the revised schedule VI with income tax act mentioned rates??
Can depreciation calculated at the rates mentioned in the income tax act,1961 while preparing the revised schedule VI?
the depreciation rates as per companies act is different from the income tax act.
In the policies of the companies it is given that they follow the rates as per income tax rules.
so by that can we prepare the revised schedule VI with income tax act mentioned rates??
CA. RAVIKUMAR
(Expert)
30 August 2012
No,
The company should provide for Depreciation as per the Schedule XIV( minimum prescribed.
Please refer the Sch XIV rate, if the depreciation rate as per income tax is more then companies act then they is no problem in providing the same.
As a normal practice The companies follows companies act rate for Accounting purpose and Income tax rate for tax purpose.
Please note that deferred tax come majorly because of rate difference of depreciation as per the companies act and Income tax act.
The company should provide for Depreciation as per the Schedule XIV( minimum prescribed.
Please refer the Sch XIV rate, if the depreciation rate as per income tax is more then companies act then they is no problem in providing the same.
As a normal practice The companies follows companies act rate for Accounting purpose and Income tax rate for tax purpose.
Please note that deferred tax come majorly because of rate difference of depreciation as per the companies act and Income tax act.
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