Depreciation whether mandatory???

This query is : Resolved 

Querist : Anonymous (Querist) 13 July 2012

One of my client is Pvt Ltd Co., Till FY 2010-2011 their previous auditors were neither claiming depreciation under books or as per Income Tax Act.

In Statutory Audit Report, the highlighted the notes saying that "Due to lossess in previous years, Depreciation have not been claimed"

What is personally believe is that as per Companies Act, even if we are not claiming depreciation, we can show the same under the Notes to Accounts.

But as per Income Tax Act, whether depreciation claim is mandatory or not??

Would be glad if anyone explains in details whether Depreciation claim is mandatory or optional under INcome Tax Act and Companies Act??

Thank you

13 July 2012

as per income tax act dep. claiming is mandatory whether loss or profit earn by company

B.Chackrapani Warrier (Expert)
13 July 2012

As a corollary to explanation 5 to section 32(1),depreciation is mandatory for the purpose of computation of total income as per the Income tax Act,1961.

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