Depreciation rate chart under companies act, 20 as per schedule ii applicable from 01. Depreciation rates and provisions as per companies act 20. We have also compiled changes to schedule ii useful lives to compute depreciation read with section 123 of companies act,20 made vide notification no. Also read depreciation rates as per companies act,1956. In this article we have compiled depreciation rates under companies act 20 under written down value wdv method and as per straight lime method slm. Depreciation rate chart under companies act, 20 for as per schedule ii applicable from 01. Depreciation rate chart as per companies act 20 with. Depreciation chart as per companies act20 simple tax. Rates of depreciation as per companies act 20 taxguru. Whereas depreciation rate given in it act are used for preparing financial statements which are filed with income tax authorities for calculating income tax. In straight line method the amount of depreciation is uniform for all the years where in written down method the amount of depreciation is highest in the first year. Rates has been changed for financial year 201718 and onwards. Therefore, there is difference between income as per books and taxable income as per it act. Depreciation rates and provisions as per companies act.
If the books of account uses depreciation as per companies act. Depreciation rates as per the companies income tax act for. Checkout the rate table of depreciation rates for financial year 201819 as per indian income tax act. Depreciation is computed either using the straight line method or written down value method.
Download also the depreciation rate as per companies act 20 in pdf. It says the depreciation shall be charged on the cost of the asset, less its residual value, spread over the number of useful life. Depreciation as per companies act and income tax act. Ca sandeep kanoi in this article we have compiled depreciation rates under companies act 20 under written down value wdv method. Depreciation rates as per income tax act, 1961 block of assets the expressions assets and blocks of assets w. Residential buildings except hotels and boarding houses. Scehdule ii 1 of the companies act, 20 prescribes the depreciation rules, rates and useful life of the assets. Depreciation as per companies act 20 for financial year 201415 and thereafter. Is it necessary to charge depreciation as per companies act in books. As soon as a person purchases a phone and uses it for the period of.
Hence the depreciable value of the asset will be rs. What is the rate of depreciation on projectors as per. For companies, depreciation rates to be considered in books of accounts are defined in companies act but while calculating income tax the depreciation will be allowed only as per rates given in income tax act. Accordingly rates are calculated in the following depreciation rate chart companies act 20. Depreciation rate chart as per companies act 20 with related law.
The depreciation rate on mobile phones as per companies act is explained very simply. Depreciation chart as per companies act basics depreciation chart. Also know depreciation as per companies act 20 for fy 201819. What is deferred tax asset and deferred tax liability dta. Just wanted to make a point, the aforementioned rates of 100% and 60% are fo assessees carrying on profession, but if assessees carrying on business in running lending libraries, then depreciation allowed is 100% and for assessees carrying on other business the rate would be 15% as per the income tax act 1961. Depreciation as per companies act and income tax act under the companies act. Is it necessary to charge depreciation as per companies. In companies act useful life is defined rates are calculated assuming scrap value of 5%. Depreciation as per new companies act is allowed on the basis of useful life of assets and residual value. A practical guide to depreciation under companies act, 20. Rate of depreciation as per companies act is given under schedule xiv and the.