Treatment of Fixed Assets less then 5000

AS-10 doesnt speak about this actually it is stated only in Schedule VI of companies Act.Since Act Prescribes the same definitely it is not voilation of Income tax Law 

Fixed Assests costing less than Rs. 5000 can be directly charged to P & L a/c as per Schedule XIV of Companies Act. Further, Depreciation need to be recalculated as per Income Tax Act, since the fixed asset is in capital nature & is not an admissable expense. For Income Tax purpose, depreciation will be charged on such fixed asset.

C.A Karne Wale Ki Love Story: Me 3 Sal Ka Tha Wo Peda Hui Me Ne Skol Admsn Lia Vo 2 Sal Ki Thi Me Primary Me Tha Vo Prp Me Thi Me Mdl Me Tha Wo Primary Me Thi Main Matric Me Tha Wo Mdl Me Thi Mai F.A Me Tha Wo Matric Me Thi Main C.A Me Tha Wo FA Me Thi Mai C.A Me Tha Wo BA Me Thi Mai C.A Me Tha Wo MA Me Thi.. Mai C.A Me Tha Wo M.Phil Me Thi Me C.A Me Tha Vo Ph.D Me Thi Me C.A Me Tha Vo Doctor Bn Gai Kal Uski Shadi Hy Aur Mera C.A Ka Paper Hy... Share

Agree with Divya :)

and from where does this love story come in between fixed asset and its transfer ?

agreed with divya

Originally posted by : Robin
	C.A Karne Wale Ki Love Story: Me 3 Sal Ka Tha Wo Peda Hui Me Ne Skol Admsn Lia Vo 2 Sal Ki Thi Me Primary Me Tha Vo Prp Me Thi Me Mdl Me Tha Wo Primary Me Thi Main Matric Me Tha Wo Mdl Me Thi Mai F.A Me Tha Wo Matric Me Thi Main C.A Me Tha Wo FA Me Thi Mai C.A Me Tha Wo BA Me Thi Mai C.A Me Tha Wo MA Me Thi.. Mai C.A Me Tha Wo M.Phil Me Thi Me C.A Me Tha Vo Ph.D Me Thi Me C.A Me Tha Vo Doctor Bn Gai Kal Uski Shadi Hy Aur Mera C.A Ka Paper Hy... Share

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Agreed with Divya, but it is a good practise to disclose assets less then Rs. 5000 in the FA schedule, with descripttion n shown at a nil value. it is also useful for Audit purposes

Mr Robin,

That means u r not concentrated on your studies

Schedule XIV to the Companies' Act,1956 (the Act) requires that asset costing Rs.5000/- or less shall be depreciated in full (i.e 100%). WDV of Re.1/- may be retained on those assets. The basic idea behind retaining Re.1/- is the identification of asset. It is nowhere mentioned in the Act that those items can be charged directly to P & L. Kindly notice the word "ASSET Costing....." in the Act.

I may stand corrected if I was wrong.

agree with divya

In books of accounts you show it as a expenses, just while filling incometax return you add back that expenses from net profit and deduct depreciation from net profit.