Final answer:
The depreciation method allowed under the Income Tax Act is the Capital Cost Allowance (CCA), which prescribes rates for different classes of assets, allowing for tax deductions over the asset's useful life.
Step-by-step explanation:
The depreciation method that is allowable under the Income Tax Act is referred to as the Capital Cost Allowance (CCA). Depreciation for tax purposes is governed by the Income Tax Act, and it sets out the rules by which businesses can claim depreciation on capital assets. Unlike other methods of depreciation such as straight-line or declining balance that are used for accounting purposes, the CCA method is unique in that it allows for the tax deductions over the useful life of an asset, as specified by the Act's various classes of depreciable property.
Each class has a prescribed rate which dictates the percentage of the total cost of the asset that can be claimed each year.