IndiaMART Taxation - India Finance & Investment Guide
Finance@IndiaMART.Com - Go to The Home Page of Finance





Export & Import
Market Watch
Taxation
Investment in India
India File
Establishing New Ventures
Organisations
General Information
Indiamart Home
Travel & Tourism
Health Care
Auto Junction
Apparel & Textile
Indian Handicraft
Bulletin News
On-line Shopping
Indian Exporters
Indian Importers
Foreign Exporters
Foreign Importers


Indian Travel Guide
Adventure India
Fairs & Festivals
Hotels in India
Administration & Procedures Corporate Tax Custom Duty Sales Tax
Excise Duty Income Tax Capital Gains Tax Tax Treaties
NRI Taxation Tax Rebates Useful Definitions VAT in India

Taxation - Corporate Taxation

Introduction| Corporate Taxable Income | Assessment and rate of tax | Minimum Alternative Tax (MAT) | Depreciation, set-off, carry forward | Tax on Distributed Profits | Rebates and allowances for the corporate sector | Tax Holiday in Free Trade Zones

Depreciation, Set off, Carry forward

Depreciation

Depreciation is normally calculated on the declining balance method at varying rates and is available for a full year, irrespective of the actual period of use of the asset in the year of the acquisition of the asset. Depreciation is allowed at half the normal rate, if the as set is used for less than 180 days in that year. No depreciation is available in the year of the sale of the asset.

Depreciation is calculated on the opening written-down value of the block of assets plus the additions to the block less the sale proceeds/ scrap value of selections from the block. Depreciation at 100% is allowed in respect of machinery and equipment the unit cost of which does not exceed Rs. 5,000. No depreciation is allowed in respect of motorcars manufactured outside India, unless they are rental cars for tourists or where such motorcars are used outside India for the purposes of business. No depreciation is allowed on plant and machinery if actual cost is otherwise allowed as a deduction in one or more years under an agreement entered into with the Central Government for prospecting, etc. of mineral, oil. The rates applicable for the accounting year ending March 1996 :


Blocks of Assets Depreciation Rates (%)
Buildings
-- Dwelling units with plinth area not exceeding 80 square meters and hotels
20
-- Mainly residential 5
-- Others 10
Purely temporary structures 100
Machinery and Equipment
-- General
25
Motorcars, other than those used in a business of hire, acquired after April 1, 1990 20
Airplanes, air engines; specified moulds; air and water pollution control equipment; solid waste control equipment; motor buses; motor trucks; motor taxis used in a business of hire 40
Specified energy-saving/ renewable energy devices; specified machinery used in mines and quarries, mineral oil concerns, salt and sugar works, iron and steel industries, glassworks, etc. 100
Furniture and Fittings
-- General
10
Special furniture and fittings used in hotels, cinemas, etc. 15
Oceangoing ships, including dredgers, etc., and speedboats 20
Inland water vessels 10

Set-off & carry forward of losses

Business losses incurred in a tax year can be set off against any other income earned during that year, except capital gains. In the absence of adequate profits unabsorbed depreciation can be carried forward and set off against profits of the next assessment year, without any time limit. Unabsorbed business losses can be carried forward and set off against business profits of subsequent years for a period of eight years; the unabsorbed depreciation element in the loss can however, be carried forward idefinitely. However, this carry forward benefit is not available to closely-held (private) companies in which there has been no continuity of business or shareholding pattern. Also, any change in beneficial interest in the shares of the company exceeding 51 per cent disqualifies the private company from the carry forward benefit.







Introduction| Corporate Taxable Income | Assessment and rate of tax
Minimum Alternative Tax (MAT) | Depreciation, set-off, carry forward | Tax on Distributed Profits
Rebates and allowances for the corporate sector | Tax Holiday in Free Trade Zones



IndiaMART

Search B2B Marketplace
Business Marketplace
Wholesale Catalogs
Industry Portals
Travel to India Send Gifts to India