Depreciation as per Companies Act

As per comapnies act depreciation is calculated as per pro rata basis. In income tax there is more and less than 6months. However a company can even chose to provide depreciation for full year but neccessary disclosure to be made in notes forming accounts.

regards

kaushik 

As per company act depreciation will be charges on pro-rata basis.   hence calculate depreciation  for the days actual used, not  on less or more than 6 month basis.

so should i go for the days basis ? complying the Income Tax Act? coz one of my senior has not provided any depreciation coz all assets are purchased on or after January being a new company! so shall i provide Depreciation ?

definitely you calculate on prorata basis.

@ Amit.

Depreciation has to be provided on pro-rata basis. but if the assets are not 'put to use', there is no need to provide depreciation.....

ok guys i got it

for example if the asset is purchased on march 1st
 for rs 2000

Furniture

then calculations will be : 2000*30/360*18.10/100 =  30.17

now doubt is should the days be 360 or 365 and the date here is 1 st march so am not counting that day and taking only remaining 30 days for the period upto 31-3

so are my assumptions correct?

No amit you should consider the day of purchase also....so the calculation will be....

2000*31/365*18.10/100 = 30.745 

as per companies act

Depreciation will b provided on day basis

and as per Income tax act

Depreciation wil b calculated

on 6 Monthly basis

if Asset is put to use more than 180 days then full deprciation will b provided

if asset is used less than 180 days then only half depreciation will b provided

Dear friend,

could you please give me the exact section or bare act or whatever regarding depreciation should be taken as per day basis, i am little confused.