This chapter covers the following topics:
Businesses in India, under the Income Tax Act, have to compute depreciation using the “Written Down Value” method. The depreciation percentage has to be applied on the Block of Assets and no depreciation can be claimed on individual assets.
Using India Localization, you can:
Create Block of assets as required under the Income tax Act
Record the block value of each Block of assets
Define the depreciation percentage for each asset blocks
Assign a block of asset to each asset addition
Identify the block of assets for each asset, which are being retired during the year
Perform adjustments in the opening written down value of any block and adjustments in the depreciation worked out in any year.
Note: It may be noted that localization provides only the reports showing the workings of depreciation based on block of assets. No accounting entries will be passed on the figures derived through localization will not be considered for any accounting entries automatically.
The Tax Handling functionality provides you with the information requirements under Income Tax Act. You can:
Define multiple blocks of assets and associate individual assets to each block of assets.
Define depreciation periods. These periods would be in sync with the financial year defined under the Income Tax Act.
Specify multiple period rates for each depreciation period. You can define multiple periods and applicable rate percentage for each period. The depreciation amount would be proportionate to the rate percentage specified for each period.
Specify date of commissioning and enable calculation of depreciation based on the date of commissioning.
Define the opening written down balances along with depreciation rates at the beginning of the year during which you would be rolling out Oracle Assets with India Localization. This information would be used for the computation of depreciation for the year.
Adjust opening written down value and depreciation amounts.
Calculate depreciation in accordance with Income Tax Act.
Generate depreciation schedule.
Definition of Block of Assets: User will be able to define block of assets by having the asset categories defined with highest level of details as required for Income Tax.
Opening Balance of Block of Assets: User is provided with a facility to enter Opening balances for block of assets (one time facility). User is provided with a report, which will facilitate arriving at asset category wise, Gross Block of Assets and written Down Value as required for Income Tax purpose.
Periodical Closing Balances of Block of Assets: User is provided with a facility generate monthly closing balances of Block of assets.
Various Transactions India Localization Supports in Fixed Assets are mentioned in this section.
While recording the additions of assets in Oracle assets, the user need to allocate the individual asset to the Block of assets defined. The block details of the assets need to be assigned by recording the details in the flex field. You need to enter localization details in Asset Categories flexfield while additions through Quick Additions and New Additions. While you would be entering these details in Mass Additions Flex field while adding assets through Prepare Mass Additions. On recording the complete asset related information including asset book and cost of the asset, user need to click on the flexfield and select the context value as India B Assets.
Before you enter the Asset Additions, you must:
Define Books
Define Asset Category
Define Quick Codes (for Block of Assets)
Define Depreciation Period Details
Navigate to Assets > Asset Workbench > Quick Additions/New Additions > Asset Category.
User will have to complete the asset addition in Base FA and come to the India Localization screen to assign the block of asset and date of acquisition.
The user has the flexibility to assign a block name to multiple assets at one go which will increase the usability significantly.
Also, the date placed in service (which is given at the time adding the asset) will be defaulted as the Date of Acquisition. This date can be changed by the user.
| Field Name | Type | Action | Description |
| Block of Assets | PICK HELP | Users need to enter the relevant Block of Assets in which the asset will be classified as per Indian Income Tax Act. | |
| Date of Acquisition | User need to record the date on which the asset was acquired |
The calculation of written down value of the Block of asset is worked out based on the prescribed calculations that need to be carried out under Income Tax Act.
Opening Written down value of the block (as at the beginning of the assessment year)
| Terms | Descriptions |
| Add | Additions during the assessment year |
| Less | Retirements of asset from each individual assets |
| Less | Depreciation on the opening written down value of the block |
| Less | Depreciation on the additions during the first half of the assessment year |
| Less | Depreciation on the additions during the second half of the assessment year = Closing written down value of the block of asset |
For calculating the depreciation under Income Tax Act, users need to run a concurrent program manually. The program is named as Income Tax Act fixed asset schedule. On completion of the program, users can view and print the output and the closing written down value will get updated.
Income Tax Act fixed asset schedule concurrent program
Users need to run Concurrent request to Calculate Depreciation for a Financial Year.
In India Localization, navigate to the Income Tax Act Fixed Asset Schedules concurrent program as follows:
Request Name: Income Tax Act Fixed Asset Schedules
The parameters for this request are described in the table below:
| Field Name | Type | Action | Description |
| Start Date | (Required) | Users need to enter start date from the LOV of a Financial year to run the depreciation calculation. Since the financial year for the Income Tax purpose is 1st April to 31st March this start date use to be 1st of April of a year. | |
| End Name | (Required) | System will consider the End date as 12 month ending from the above start date. | |
| Book Name | (Required) | The User need to enter Book Name where in the Depreciation Calculation is need to be done. |
After completion of Run Depreciation, users can view the Fixed Assets Schedule as per Income Tax Act (Block wise) through Reports. If the user needs to add an unplanned depreciation, it can be done in the Depreciation adjustment column of Opening WDV Balance form. Unplanned Depreciation amount will be shown separately in the report output.
Fixed Assets generates these reports for India:
India Income Tax Fixed Assets Schedule - This report is a Fixed Asset Schedule as per Income Act, provides details of Block of Assets.
India Depreciation Detail Report - This report provides information on depreciation calculated for each asset.
This report is a Fixed Asset Schedule as per Income Act, provides details of Block of Assets. Use the Submit Requests (India Local Fixed Asset ) form and enter India-Depreciation for one year in the Name field to submit the report.
F.Y Start Date: Financial year start will be available in the LOV, Once the start date is entered, the system will take the end date as end of the Financial year. The user need to enter the relevant Corporate book name for which the Income Tax Fixed Assets schedule is to be taken. Report headings provide you with general information about the contents of the report . Oracle lists Corporate Book name and financial year details based on User parameter input.
S.No: Serial Number for the Block of Assets will be reported
Type: Block of Assets name will be reported
Period: Depreciation period in a financial year will be reported
Opening WDV as on start date of a Financial year: Opening Written Down Value for a Block will be reported
Addition during the year: Addition made during the year to a Block will be reported
Deletion and Sale in the year: Deletion and Sale during the year to a Block will be reported
Deletion and Sale in the year: Deletion and Sale during the year from a Block will be reported
Total: Total of WDV balance for a Block before applying depreciation Block will be reported
Rate of Depreciation: Rate of Depreciation for a block will be reported
Depreciation for the year: Depreciation for a block for the year will be reported
Closing WDV as on End date of a Financial year: Closing Written Down Value for a Block will be reported
Start Date: Financial year start will be available in the LOV, Once the start date is entered.
End Date: End date as per User requirement can be entered.
Level of details: The user can specify either a Detailed Report or a Summary Report according to his requirement. Detailed report will provide complete assets details and Summary Report will provide Block wise details for multiple years.
S.No: Block of Assets name will be reported
Period: Period for which report is submitted
Opening WDV as on start date of a Financial year: Opening Written Down Value for a Block will be reported
Addition during the year: Addition made during the year a financial year to a Block asset wise will be reported
Assets Number: Assets Number added to a Block during the financial years will be reported
Deletion and Sale in the year: Deletion and Sale during the financial years of an asset will be reported
Deletion and Sale in the year: Deletion and Sale during the year from a Block for an asset will be reported
Total: Total of WDV balance for a Block before applying depreciation Block will be reported
Rate of Depreciation: Rate of Depreciation for a block will be reported. Depreciation for a block for the year will be reported
Closing WDV as on End date of a Financial year: Closing Written Down Value for a Block will be reported