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Tally software depreciation rate??

saurabh sawlani (Self employed ) (2193 Points)

14 May 2021

dear colleagues,

tally software per depreciation rate kya hai?? or tally software ko fixed assets me show karna correct rhega na?

regards,

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8 Replies

CMA Poornima Madhava (CMA) (13112 Points)
Replied 14 May 2021

For software, rate of depreciation is 40% under IT Act.

Initial purchase of software is an asset. Yearly renewal is an expense.

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CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 14 May 2021

40% Depreciation

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saurabh sawlani (Self employed ) (2193 Points)
Replied 14 May 2021

Ohhk thanks a lot Poornima Mam & saurav sir

veerendar singh (tax consultant) (3306 Points)
Replied 14 May 2021

It should charged to p&l since we usually buy only a yearly license

CMA Poornima Madhava (CMA) (13112 Points)
Replied 14 May 2021

Yearly renewal cannot be done without buying the software initially.

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veerendar singh (tax consultant) (3306 Points)
Replied 14 May 2021

Does the license agreement stipulate two sets of payment i.e., initial software purchase and yearly renewals?
if so, what part of the initial cost is attributable to usage fee for the first year. such amount must be brought to p&l. only that part which is for one time fee for obtaining software should be depreciated