Depriciation

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This query is : Resolved

Pavan kumar (Querist)

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)

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)

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.