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Depreciation Calculation
shall we calculate depreciation as per Income tax on opening balances of block of assets as per companies Act of every year??? is it correct ?? is there any other method plz suggest ..
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For companies depreciation is computed in books of accounts as per the rates prescribed in Schedule II of Companies Act,2013. The rates should be adopted based on the method followed by the company consistently i.e., either SLM or WDV.
If the company is subject to tax audit u/s. 44AB of the Income Tax Act, 1961 then depreciation has to be computed even as per Rule 5 of Income Tax Rules seperately which forms part of the tax audit report.
Please understand the depreciation for companies under companies act and income tax act are two seperate calculations and connot be mixed. It has to be done seperately under each act
for companies accounting and income tax has their separate calculation. Dep rate in IT is predetermined whereas in Co. Act it is based on useful life's of Assets
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