Regarding ICDS V

[RAJEEV JAIN]

In case of Company Assessee, Depreciation is charged in books as per rate /useful life mentioned in Companies Act but in Income Tax Act, it is allowed as per WDV method and specified rate of depreciation. ICDS V also says that depreciation shall be allowed as per Income Tax Act. Hence, Should we declare the difference between depreciation charged in boks (as per Companies Act) and Income Tax Act as adjustment on profit because of deviation from ICDS in Tax Audit and ITR or not?

AI Summary

Depreciation Discrepancy: Aligning Companies Act and Income Tax Act for Accurate Profit Adjustments as per ICDS V. A query was raised regarding the treatment of depreciation for a company assessee, highlighting the difference between the depreciation charged in the books as per the Companies Act and the depreciation allowed under the Income Tax Act using the Written Down Value (WDV) method. The question was whether the discrepancy should be declared as an adjustment on profit due to deviation from ICDS V in the Tax Audit and Income Tax Return (ITR). The response suggested that such an adjustment should indeed be made.