Depreciation of fixed assets

Hai friends, Please tell me,Depreciation on fixed assets be calculated including tax on its sale value or excluding its tax?

Replies (8)

no

if tax is paid on it  & setoff is caim  in vat then you will take dep on net amount

dear friend

if you read accounting standered 10 all the expenses incurred specifically for a asset to bring it to its intened use should be capitilise

this becomes the historical cost

and as per accounting standard 6

depreciation is to be calculated on historical cost

so if the taxis are capitilise then depreciation is to be charged on the tax amount also

when to capatilise interest is when they are not clamed as setoff of refunded from it department

waiting for your response

u have to take total value including Tax.,  U can't take VAT for Fixed asset, there fore no question of excl., tax from fixed assets value.,


In case of sale of assets, then Vat can be claim from Sale Tax, and even dep., on Sale tax can be deducted on sales value.,


I Also Agree with Mr.Mahesh reg.,  


Thx

pls send me rate of dep Income Tax act  as well as companies act

 

when we purchase fixed assets it is record into RG 23 c II . it is capital goods register in which we claim excise duty ,edu. cess and She cess. . and we have to deduct vat from the fixed assets after that we have to calculate deprication.

second thing .

according to AS 10

we include duties and taxes when they are not refundable.

but if its refundable than firstly it is deduct than we calculate historical cost

dep. charge on historical cost

 

when we purchase fixed assets it is record into RG 23 c II . it is capital goods register in which we claim excise duty ,edu. cess and She cess. . and we have to deduct vat from the fixed assets after that we have to calculate deprication.

second thing .

according to AS 10

we include duties and taxes when they are not refundable.

but if its refundable than firstly it is deduct than we calculate historical cost

dep. charge on historical cost

 

Originally posted by :Azmathullah Khan
" u have to take total value including Tax.,  U can't take VAT for Fixed asset, there fore no question of excl., tax from fixed assets value.,In case of sale of assets, then Vat can be claim from Sale Tax, and even dep., on Sale tax can be deducted on sales value.,I Also Agree with Mr.Mahesh reg.,  Thx "


 

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