Depriciation

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Pavan kumar (Querist)
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29 April 2009 Dear Sir/ Madam
I want to know wether the depriciation on buildings is the same on Commercial & residential buildings, let me know... and i have another doubt that What is the difference between financial year & asessment year.

Pavan kumar
Rajahmundry.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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29 April 2009 No Rate is nopt same and FY is period considard for Accounting i.e. April 1 to March 31st.

Assessment year is year next to current year. Current year is also called previous year in finance terminology.

Vipul J. Bhavsar

Vipul J. Bhavsar (Expert)
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29 April 2009 As prescribed by Income Tax Act, Depreciation is not same for Residential Buildings and Commercial Buildings.
The Depreciation rate is as follows:
Residential - 5%
Commercial - 10%

FY, AY - The difference is made for the purpose of Charging and Assessing the Income Tax on the Income earned.
Financial year(FY) - The period from 1st April to 31st March is known as FY.
Assessment Year (AY) - The period (April-March) immediately succeeding Financial Year is AY.The Return submitted by the assessee is assessed in AY.
This will be clear from the example -
Mr. A earns income Rs. 5 Lacs in FY 2007-08. Such income is Assessed to Tax by the IT dept in FY 2008-09. Such FY 2008-09 is known as AY.

If FY is 1st April 2008-31st March 2009 then the AY will be 1st April 2009-31st March 2010.