Depreciation rates

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HARSHIT JAIN (Querist)
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14 February 2013 Sir,
can rates higher than that mentioned in Sec 350 of the Companies Act be provided on assets. what if the management want to provide less rates?

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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14 February 2013 Relevant provsions of Section 205 is reproduced below -

depreciation shall be provided either—

(a) to the extent specified in section 350; or

(b) in respect of each item of depreciable asset, for such an amount as is arrived at by dividing ninety-five per cent of the original cost thereof to the company by the specified period in respect of such asset.....

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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14 February 2013 The rates mentioned in schedule are only indicative and the company can charge higher rates of depreciation.

However you cannot charge depreciation at rates lesser than what is prescribed

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HARSHIT JAIN

HARSHIT JAIN (Querist)
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14 February 2013 Sir,
could u pls elaborate the language of point (b) as it is vry complicated

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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14 February 2013 Rate which would write off 95% of the cost of asset over its useful life.