Depreciation on car as per companies act?

As per the companies act 2013, the rate of depreciation for cars/vehicles and their useful life is mentioned below

 They are categorized by the companies act as follows:

1. when these car/ motor vehicles are owned with no intention to sell within the accounting period and are generally used to generate revenue. For example, giving cars/motor vehicles on lease or hire purpose.
2. cars/motor vehicles when used for purposes other than the business of hire. For example, a car is owned for official use.

Car/motor vehicles are considered as fixed tangible assets. Treatment of these cars/ motor vehicles is similar to those of other fixed assets. The depreciation will be shown as an expense in the profit and loss account and also the value of these assets will be adjusted in the balance sheet.

Explaining with a simple example:  Mars.Ltd purchased a car for Rs 10,00,000, and use it for its official purpose. Its useful life as per act is taken as 6 years and the rate of depreciation as 31.23% as per the WDV method.

Therefore depreciation as per WDV is calculated as follows

Cost of car = Rs 10,00,000

Residual value = NIL

Rate of depreciation = 31.23%

depreciation for first-year = Rs (10,00,000 – NIL)*31.23%

= Rs 3,12,300

Calculated depreciation on this car will be shown in the profit and loss account as an expense and the same will be treated under the balance sheet every year. Here is the extract of profit and loss and the balance sheet for the above example.