Dear All,
There are two method for depreciation (SLM and WDV), What is the significance to adopt the method as per Companies Act, while for computation of Tax Liability, we have to take the rates as per income tax act.
Can we adopt both methods (SLM and WDV) at the same time. What is the procedure to determine the useful life of Asset in SLM Method.
Please clarify with example.
Best Regards.
Pradeep Kaushik
Exploring Depreciation: Straight Line vs. Written Down Value Methods Under Companies Act and Income Tax Act A user inquired about the significance of adopting different depreciation methods, specifically the Straight Line Method (SLM) and Written Down Value (WDV), under the Companies Act versus the Income Tax Act. They questioned whether both methods could be used simultaneously and sought guidance on determining an asset's useful life under SLM. A respondent clarified that Schedule XIV of the Companies Act provides SLM rates and that companies can use SLM or WDV under the Companies Act while using WDV for income tax purposes. Depreciation rates and methods vary by industry based on asset lifecycles. (AI Summary)
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