Depreciation under income tax act & company act

Dear Sir, While preparing final a/c, depriciation is calculated as pe companies act only.........

Schedule XIV of companies act prescribes minimum rates of depr..................So, the rates below dat are not considered to present ture & fair view.............however, rates as per income tax act may be used in final a/c too provided they are higher than the rates specified in schedule XIV.

There are many provisions in The Companies Act which are based upon the net profit calculated as per Schedule VI. For example Dividend has to be declared on the basis of NP computed as per the Schedule VI.

That's why we have to provide depreciation as per Schedule VI

Dear All

suppose -  we use 13.91% rate of Depr on machine  as per the company tax act  while making final a/c ,then,  will this be changed as 15 % at the time of assessment that is as per the income tax act

m i correct , pl reply

well, one thing should be distinctly understood.

1.    The depreciation for the purpose of Income tax is to be computed as per income tax Act only, thus    

whether the taxable entity is company or not, it is to be followed.

2. The depreciation for the purpose of company is to be applied as per SCH VI which stipulates rate as minimum rate of depn. So companies are at freedom to charge higher rate of deprn provided it gives a true and fair view.

thus for income tax 15 p.c. will be considered irrespective of rate as per sch VI

My dear,

Depreciation under companies act is to arrive at distributable profits, and to show true and fair profit / loss in the period of audit and  the dep at the  minimum rates prescribed under sch-XIV must be charged for declaring any dividend.

where as dep rates as per IT act is normally higher than the companies act is to give relief in tax to the assessee,  to provide them to replace the machinery / asets at an early peiod, and to cope with technological upgradation.

hope this will clarify your doubt.

Dear Freind At the time of prepration of final account we take depreciation as per as per companies act only, 

The use of  Depreciation under Income tax is to derive the Deffered Tax Liabilityor Asset . The difference between Companies Act Vs Income tax lead to consider Deffered Tax

difference between dep. as per company act and as per it act is deffered tax assets/liabilities...

Dear Sir,

Please forward me the details of depreciation under income tax act % company act for calculation of deferred tax liability/assets.

Thanks & regard,

Mamai Dutta.

if we are applying income tax rates in making financial statement as per shedule vi then should we also apply rule of 180 days as in it act 
or we calculate it on days basis as per co. act

Dear sir,

can you tell me individual proprietorship firms has made depreciation in the books of accounts according to companies Act or inome tax act 

Regards

Ramesha.m

Dear Friend,

For companies established in India, they have to prepare Financials as per Schdule VI of Income tax Act,1961 (Now Revised Schdule VI is applicable). So for the Financials we have to Take Depreciation rates as per Companies Act.

For Income tax Calculation, which you are calculating as per Income tax act, the rates of Companies act are not applicable , You need to consider the rates as specified under income tax act

source: https://www.exploreincometax.com/Income-tax-Ready-Reckoners/depreciation-as-per-income-tax-act-1961