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Depriciation in care of prop and partnership

Chris cyril (Manager) (25 Points)

16 September 2017

Is it mandatory for proprietor concerns and partnership concerns to incorporate the depriciation in the p&l.

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9 Replies

Ashiwini Ballodia (Managing Partner at TAXounting) (8727 Points)
Replied 17 September 2017

As per me it is not mandatory to incorporate depreciation in books of account but you have to take deduction of depreciation in income tax return

RAJA P M ("Do the Right Thing...!!!") (127072 Points)
Replied 17 September 2017

In my view...
Yes. it's mandatory...

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 17 September 2017

Not compulsory to show in P&L.
But as per Income tax you have to charged irrespective that you dont charged dep in your books.

Chris cyril (Manager) (25 Points)
Replied 17 September 2017

If he is showing depcr in income tax filing then the firm will report lower profits correct.

Chris cyril (Manager) (25 Points)
Replied 17 September 2017

Raja sir in case of companies I came to know that it's compulsory for declaring dividends but in case of prop and partnership firm even though there are fixed assests it's not compulsary for the firm to keep in depcr in p&l

Ashiwini Ballodia (Managing Partner at TAXounting) (8727 Points)
Replied 17 September 2017

Yes, in books profit will be higher as compared to IT return i.e in IT return profit will be lower

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 17 September 2017

Profit in IT return may be lower from book profit due to depreciation.

RAJA P M ("Do the Right Thing...!!!") (127072 Points)
Replied 18 September 2017

Yes Madam,
It's differ from IT to books of accounts.
In case the assessee get any Scrutiny then how show/match his books of accounts and matching his IT return.....

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 18 September 2017

Details will be given to them. There is provision in IT for provisioning of depreciation even if same is not allowed in books. Give details in your return.
IT deptt in no case ask for that difference.