depreciation calculation for companies

For tax purpose Income tax depreciation shall be allowed

In Acouting it should  be deferred assets

as par company act the calculted of deprication

In the books of the company, Depreciation has to be charged as per the companies act. as far as accounting is concerned, it does not matter whether such depreciation is less or more than that of income tax.

While computing the taxable income, we shall add back the depreciation to the book profit and deduct the depreciation calculated under income tax act. Hence depreciation under IT Act is relevant for taxation purpose.

The difference between the tax payable on book profit and acutal tax paid is taken to the deferred assets/liabilites, as the case may be.