Interested to Buy Any Domain ? << Click Here >> for more details...
what is the difference between depreciation in account books
and depreciation as per income tax act
- 2 Answers
- 5160 Views
- I also Faced
- E-Mail Answers
Answers were Sorted based on User's Feedback
Answer / yogendra.c
The major Differences are as follows.
1. Method of Depreciation.
In Accounts any depreciation method can be follows as suitable by the company & Accounting Stadard 6. but in case of Income Tax Act, 1961., Specific Method should be followed as prescribed by the Act. For Eg: Electricity Company Should follow Written Down Value (WDV) Method for Calculation of Depreciation.
2. Rates:
In Accounts no rates prescribed, but Section 32 of Income Tax Act, 1961 & Appendix-I to the Income Tax Rules, 1962 specifies the Rates of Taxes to be deducted.
3. Categories:
In Accounts categories is not important due to the own methods of depreciation, but in Income Tax Act, 1961 there are only 4 Categories of Depreciation that is Building, Furniture & Fittings, Machinery & Plant, Intangeble Assets.
4. Computation:
In Accounts Complex computation as No of days of Assets used & other stuffs to be known for calculation depreciation, but in Income Tax, the Computation U/s 32 is very easy.
| Is This Answer Correct ? | 2 Yes | 0 No |
In general accounting any method of depreciation can be used for calculating accounting profit but while calculating corporation tax, Taxable profit is calculated and in that HMRC disallows depreciation on fixed assets.
According to UK tax law (HMRC)
Depreciation on fixed assets is disallowed for corporation tax purposes. Companies are instead allowed a fixed writing down allowance on certain capital expenditure such as expenditure on plant and machinery.
| Is This Answer Correct ? | 0 Yes | 0 No |
How much mathematics knowledge is necessary or required in accounting?
financial management
what is holding cost
If the company acquires equipment prior to incorporation what are the accounting entries?
What all are the documents need to check for a supplier payment?
After close Balance Sheet, we find a expense which was wrongly debited in Profit and Loss A/c. How we adjust next accounting period?
The balance sheet prepared for a
WHY U HAVE CHOOSE ICWA WHY NOT CA
Which sistuation Current Assets become worKing capital?
WHAT IS ACCOUNTING HEAD FOR TRADE FINANCE? I HAVE PAID 49268 FOR TRADE FINANCE.WHERE SHOULD I TAKE IN TALLY
a person took Rs. 100000 for 5 years at the rate of 10%.He deposits rs. 10000 in first and second year.Third year he deposits rs 30000, forth year deposits rs 40000. Then final year how much he should deposit?
i need clarification about tds will be calculate before deductions or after deductions on gross salary+incentive
Audit 
