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Difference between depreciation as per it act & co. act?

vinayak c. chavan (CPT passed) (1011 Points)

15 November 2011

WHat is the difference between Depreciation as per IT Act & as per Co. Act?

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4 Replies

ashish gupta ( student) (1922 Points)
Replied 15 November 2011

rates are different in both the acts. For computaion of taxable income depreciation rates as per IT Act are considered and for the purpose of preparing P&L A/c and balance sheet depreciation rates as per Companies Act are considered

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sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 15 November 2011

Rates are different in both Companies act and Income tax Act

In Income tax Act we have to compute depreciation on Block of Assets Concept where in you have to follow only WDV and not straight line except power generating companies

COmpanies Act we have schedule xiv Rates for Straight line and WDV based on shifts which are minimum rates and a company can follow higher rates than envisaged by Shedule xiv

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Roshan A (Chartered Accountant) (458 Points)
Replied 15 November 2011

Income Tax Act provides for

1.Depreciation rates for different assets...

2.Also it allows only usage of WDV method of depreciation...

3.there is additional depreciation allowed on NEW MACHINERY purchased....

whereas,

Companies Act only Provides for compliance with AS for depreciation issued by ICAI

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