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?

[DR.MARIAPPAN GOVINDARAJAN]

In my view yes

AI Summary

Depreciation under ICDS V must follow Income Tax Act rates, so book-tax depreciation differences require tax adjustment disclosure. ICDS V mandates depreciation for tax purposes to follow the Income Tax Act; therefore differences between depreciation charged in books under the Companies Act and depreciation allowable under the Income Tax Act must be treated as book-tax adjustments and disclosed in the tax audit and income-tax return.