GST-ITC CLAIM ON FIXED ASSET OR DEPRECIATION

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When dealing with fixed assets, you have a choice between claiming Goods and Services Tax (GST) Input Tax Credit (ITC) or making a provision for depreciation in your Profit & Loss account. Generally, claiming GST ITC is more advantageous as it provides a benefit for the full asset value. Depreciation, on the other hand, typically offers a tax benefit equivalent to your income tax rate, which is usually lower.

bhaskar sharma

bhaskar sharma (Querist)

06 June 2022 One can claim GST ITC on Fixed asset purchase or make provision for Depreciation on fixed asset in P & L Account ?.B

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

06 June 2022 Advisable to make provision for Depreciation, unless useful life is very short.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

06 June 2022 Better go for depreciation .

CA Altamush Zafar

CA Altamush Zafar (Expert)

08 June 2022 If you can take ITC and utilse it then always better to take ITC since you will get benefit for the whole amount.
Instead in depreciation you will get a benefit of 30% if that it income tax rate.

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