If monthly depreciation expenses increase, how would it affect income tax on profit?

When monthly depreciation expenses increase, they reduce the taxable income reported by a business. Depreciation is considered a non-cash expense that allows companies to allocate the cost of tangible assets over their useful lives. By increasing depreciation expenses, a company reflects lower profits on its income statement. Since income tax liability is based on taxable income, a decrease in profits due to higher depreciation results in a lower income tax expense.

Thus, if a company has higher depreciation expenses, it directly leads to a decrease in the amount of income that is subject to taxation, ultimately reducing the amount of income tax owed. This is why the appropriate answer is that it would decrease.