Deprecation calculation as per companies act 2013 in Income Tax

Deprecation calculation as per companies act 2013 in Income Tax

Deprecation calculation as per companies act 2013

Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount of an asset is the cost of an asset or other amount substituted for cost, less its residual value. The useful life of an asset is the period over which an asset is expected to be available for use by an entity, or the number of production or similar units expected to be obtained from the asset by the entity.


Follow the below steps to enter and calculate the deprecation rate as per companies act 2013


Step 1
 
 Open the Income Tax software - Go to  Transactions  →  Balance sheet  → Formats >Fixed Asset Chart   option given in the menu bar.




Select   Any method WDV or SLM can be used   ( Straight-Line  Method  ( SLM ), an equal amount of  depreciation  is written off every year. Conversely, in the written down value  method  ( WDV ), )


Step 2
 Select Assets category and click on detail  
 


Step 3
 Detail of Opening balance (if user  have already implemented new deprecation chart last year) and detail of addition  (new deprecation chart first time)




Now enter required details

* Original cost of asset
* Useful life (in years)


Step 4
 Click on calculate rate of deprecation 





User can enter depreciation rate manual also.

 

Click On "Working of calculated deprecation"  to check deprecation calculation.








Note  : - This  Functionality to calculate rate  -Only  if you are implementing new deprecation chart first time. if you have already implemented new deprecation chart last year , you are required to enter same rate of deprecation , that you have to use last year 




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