Depreciation Rate as per Income Tax Act

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This discussion clarifies the depreciation rate for books purchased by a library registered under the Bombay Public Trust Act, 1950. According to the Income Tax Act, the applicable depreciation rate for books is 40%. The correct accounting treatment involves debiting Fixed Assets - Books and crediting Cash/Bank for the purchase, followed by a depreciation entry.

Harshada Kadam

Harshada Kadam (Querist)
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28 December 2020 Assessee Type - Library registered under Bombay Public Trust Act, 1950
What will be the treatment of Purchase of books if Book is shown under Fixed Asset ? Kindly guide

Aashok Kumar Sharma

Aashok Kumar Sharma

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29 December 2020 The depreciation rate is 40% as per IT Act.

The purchase entry will be as follows:

Fixed Assets - Books - Dr
Cash/Bank - Cr.

Depreciation Entry:
Depreciation - Dr.
Books - Cr.

https://www.incometaxindia.gov.in/Charts%20%20Tables/Depreciation%20rates.htm

Harshada Kadam

Harshada Kadam (Querist)
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29 December 2020 I am asking about depreciation rates?