One country, one finance Minister but there are two method of calculation of depreciation on fixed assets and that is applicable only for companies and not other assesses.

  • Companies Act allows to use either SLM (Straight Line Method) OR WDV (Written Down Method) method whereas the Income Tax Act allows the user to use WDV method only.
  • Companies Act mandates to maintain assets and calculate depreciation individually while the Income Tax Act mandates to follow as per block method (grouping of assets falling under the same rate)
  • Companies Act gives the user the number of useful life of the asset to calculate the rate of depreciation, while the Income Tax Act gives direct depreciation rates.
  • Companies Act allows the user to calculate profit or loss on sale of assets immediately when an asset sold, whereas the Income Tax Act recognises profit or loss on sale of assets only when entire assets in a block or group is sold or the value has gone zero.