Bizblog term of the week: Capital Allowance

        Companies charges depreciation on depreciable asset such as buildings, plant & equipment, or machinery.But for tax purpose,tax authorities charges capital allowance.So we can say,capital allowance is the depreciation that tax authorities charges.

    Capital Allowance is a claim against Assessable profits by companies when computing tax liabilities,it is a yearly deduction or depreciation that can be claimed for income tax purposes on the cost of certain assets.

   Depreciation is a non-allowable expenses for tax purposes that must be added back to profit before tax before now applying capital allowances in calculating your tax liability.