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Tax depreciation is the one done based on Tax rules, for example certain asset purchased from sep 2010 to nov 2010 is eligible for 100% depreciation.]
Book depreciation is the one based on corporate law . Vehicles depreciated for seven years. The net book value is the one represented in financial statements.
Tax man will adjust profits based on tax depreciation rules and revise tax accordingly.
What else can I help you with?
What is book depreciation mean?
The depreciation rate for accounting may be different than that of taxation. The depreciation as per books of accounts may often be termed as book depreciation while that calculated under tax law is termed as tax depreciation.
Do you have to use the same depreciation for accounting and tax?
Tax department has developed theire own depreciation schedules for different assets class and use their own depreciations rather than using accounting depreciation and due to this accounting depreciation difference there is also difference in tax we pay and tax we calculate and called "Deffered Taxation"
What is difference between Tangible and real property tax rates?
There is absolutely no legal diffierence between except that all properties in these categories are are of different value or worth interms of depreciation.
Define deferred tax?
Deferred tax is the future tax liability or assets. It could either be tax liability or tax assets totally depending on the temporary difference which means the difference between book value and tax valued.
Is depreciation tax deductible?
Not, depreciation is not deductible for tax purpose. Because it is not wholly exclusively in production
How do you account difference between depreciation as book and depreciation as tax?
This will be found under "deferred taxes" on the income statement.
What is the difference between accounting depreciation and tax depreciation?
In accounting, depreciation is an allocation of a previous expenditure, while in economics depreciation represents a decline in current value.
What is book depreciation mean?
The depreciation rate for accounting may be different than that of taxation. The depreciation as per books of accounts may often be termed as book depreciation while that calculated under tax law is termed as tax depreciation.
Do you have to use the same depreciation for accounting and tax?
Tax department has developed theire own depreciation schedules for different assets class and use their own depreciations rather than using accounting depreciation and due to this accounting depreciation difference there is also difference in tax we pay and tax we calculate and called "Deffered Taxation"
What is book mean?
The depreciation rate for accounting may be different than that of taxation. The depreciation as per books of accounts may often be termed as book depreciation while that calculated under tax law is termed as tax depreciation.
What is the difference between gross and net dscr?
Gross DSCR= Cash accruals ( Profit after tax + Depreciation) + Interest ----------------------------------------------------------- Installments of loan + Interest Net DSCR = Cash Accruals (PAT + Depreciation) -------------------------------------- Installments
What is difference between Tangible and real property tax rates?
There is absolutely no legal diffierence between except that all properties in these categories are are of different value or worth interms of depreciation.
What are the temporay and permanent difference of an account?
Account differences occur when accounting rules for Book and Tax accounts vary. A temporary difference will be balanced out over time - e.g. accelerated depreciation for tax purposes. A permanent difference will not be balanced out over time - e.g. tax on municipal interest (this has is non-taxable, but will show up on the books).
Define deferred tax?
Deferred tax is the future tax liability or assets. It could either be tax liability or tax assets totally depending on the temporary difference which means the difference between book value and tax valued.
Is depreciation tax deductible?
Not, depreciation is not deductible for tax purpose. Because it is not wholly exclusively in production
What is lost depreciation tax shield?
Lost depreciation tax means that loss of that tax amount which could be saved if there would be depreciation expenses in profit and loss account which will reduce the profit and hence the tax as well.
Deferred taxes arise from the use of the same method of depreciation for tax and reporting purposes. True or false?
False. Deferred taxes typically arise from differences in accounting methods or timing between tax reporting and financial reporting, such as using different depreciation methods for tax purposes than for financial statements. When the same method is used for both, there is generally no temporary difference, and therefore, no deferred tax implication.
