Depreciation - annuity method

suppose, I purchased plant and machinery and I take loan on it...moreover I transfer it on lease to someone.

now, annuity method will be considered here...
my question is ...interest on loan which I pay will be my expense and interest on lease is my income..

can I setoff interest expense against interest income???
Replies (8)
Quick Summary
This discussion explores the annuity method of depreciation, particularly when a leased asset was financed with a loan. The core question is whether interest paid on the loan (an expense) can be offset against interest received from the lease (income). While tax regulations generally allow for setting off expenses against income, accounting treatment might differ, potentially recording both depreciation and interest within the asset's account.

Okay...thanks a lot...
Expenses made for earning income is allowed to set off
As per income tax , we can setoff the expense against income..but as per accounting , we can mention both in plant and machinery account..
like..
1.)depreciation account Dr
to plant and machinery

2) interest on loan account Dr
to loan account

3) plant and machinery ac Dr
to interest on lease account

is it correct???
Yes exactly
Okay...thank you ma'am
Welcome...... Dear ...
Depreciation annuity method is basically not required.
Read the query first @ sabyasachi

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 21 September 2026
Consultant - Reporting

Finrep Advisors LLP

Mumbai

CA

View Details
Company
ARTICLESHIP 16 September 2026
CA Article Trainee

SR BAGAI & Co.

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 16 September 2026
Article Assistant

MANUJ SHARMA AND COMPANY

Noida

CA Inter

View Details
Company
09 September 2026
Chartered Accountant

Aviv Global Private Limited

Ahmedabad

CA

View Details
Company
ARTICLESHIP 18 September 2026
Industrial Trainee

Twenty Point Nine Five Ventures Private Limited

Noida

CA Inter

View Details
Company
17 September 2026
Chartered Accountant

Dass Gupta & Associates

Gurgaon

CA

View Details
Company
ARTICLESHIP 07 September 2026
Article/ Paid Assistant

Murali and Sumeet Chartered Accountant

Bengaluru

CA Foundation

View Details
Company
18 September 2026
Accounts & Finance Specialist

ULTRA CHEMICAL WORKS

Thane

CA Final

View Details