Why the depreciation rate differes as per company standard and as per Govt standard?



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Why the depreciation rate differes as per company standard and as per Govt standard?

1 Answer(s)


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Income tax department does not differentiate different companies from difference industries for depreciation.
However in day to day actual company operations the realities of each industry is different and hence merit different depreciation policies. For example the depreciation policy to depreciate a machinery owned by a steel company might be very different from depreciating a computer owned by an IT firm. And it is impossible for the tax department to provide depreciation values for every minute asset. Hence companies make their calls

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