Impact of Depreciation and Taxation Policy on the Profitability of Public Sector Enterprises

Author:Arvind Kumar Yadav

Abstract:
The depreciation policy of the business is evidenced by the rate at which depreciation is charged off each year. It must be remembered that depreciation is a cost of doing business which must, along with other expenses, be considered in determining net profits. A concern which is liberal in the amount charged off each year is said to have a conservative depreciation policy. In considering a depreciation policy a concern which is on the alert to repair and renew of its assets and thereby reduces the amount necessary to charge to depreciation each year. Before Independence, the main function of taxation was considered to be to raise an amount of revenue large enough to enable the Government to discharge its basic functions, and enough attention was not paid to the welfare responsibility and role of a welfare state. In 1956, the state was pledged tomove in the direction of a socialistic society. Hence it was realised that the taxation policy and proposals should be so framed as to realise the goal of socialist economy. In this research paper researcher studied the impact of depreciation along with all aspect of providing depreciation in public sector enterprise including methods of depreciations and also the effects of depreciation under changes of price level and its practicability in India. Taxation is also a very important factor for computing profit of public sector enterprises so researcher studied direct and indirect taxation policies of Government of India.

Keywords:Keywords: Depreciation, Price level change, Taxation, Tax holidays.

DOI:

International Journal of Trade & Commerce (Vol: 6 Issue:1)