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Deprecation under companies act
a company has purchased machines on the following dates first on 2nd may 2012, second on 13th sep 2012 and third on 3 jan 2013. how to charge depreciation on addtions to macinery as per companies act
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As per the Company Act 1956. the depriciation charge on the machinary @ 15% .
Depriciation = value of machine *15%*(No of days used during the year /365)
using the above formula you can calculate the value of depriciation on all of machine . on the other hand Depriciation As per income tax charged . if you have purchased the machine on or before 2 October then depriciation would be calculated for whole year and if purchased on and after 3rd october than depriciation would be calculated for six month only
Depreciation should be charged proportionately based on number of days of usage during the year.
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