Different rate of depreciation

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Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2010 Why there is different rate for depreciation under income tax act and under the company act,1956?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 September 2010 For IT rates pl refer appendix -1 to rule 5 of the IT Rules,1962.
Schedule X1V may be referred to for rates as per Companies Act,1956.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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13 September 2010 Depreciation as per Companies Act is used for accounting (hence reporting) purpose and as per IT Act is used for calculating depreciation for tax purposes ie for calculating the tax liability.The very basic purpose is that by giving higher benefit in income tax the Govt want you to invest more in capital infrastructure to save tax and by this way they want to build a chain of capital investment. there in nothing other moto in this.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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13 September 2010 agreed with sanjay ji.

To boost capital investment , Dep rate is higher in Income tax . For example ADDITINAL DEPREICATION OF 20% is allowed with basis dep 15% on investment of new plant & machinery.

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