Rates of Depreciation as Per Income Tax Act for a.Y

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Home » Income Tax » Rates of Depreciation as Per Income Tax Act for A.Y. 2010-11

Rates of Depreciation as Per Income Tax Act forA.Y. 2010-11

Wednesday, July 14, 2010, 8:43Income TaxArticles, Featured8,845 views

Block of Assets :-The expressions Assets and Blocks of Assets w.e.f. 1-4-1999 shall mean a group of assets fallingwithin a class of assets comprising:–

1. Tangible Assets being buildings, machinery, plant or furniture;



2. Intangible Assets being know how, patents, copyrights, trademarks, licences, franchises or any other business orcommercial rights of similar nature; in respect of which samepercentage of depreciation is prescribed.

Rates of Depreciation (Applicable w.e.f. A.Y. 2006-07

II Rates of Depreciation (Applicable w.e.f.A.Y. 2006-07, Refer Notification No. 67/2005dt. 28th February, 2005 w.e.f. 2-4-2005)

RATE %

I Buildings : (See Note 2)

1 Buildings which are used mainly for residential purposes except hotelsand Boarding House

5

2 Buildings which are not used mainly for residential purposes and otherthan mentioned in 1 & 3

10

3 Buildings acquired on or after 1-9-2002 for installing P & M formingpart of water supply project or water treatment system and put touse for the purpose of providing infrastructure facilities u/s. 80-IA(4)(i)

100

4 Purely temporary erections such as wooden structures. 100

II Furniture and fittings including electrical fittings 10

III Machinery and plant : (See Note 3)

1 Machinery and plant other than those covered by sub-items 2, 3 and

8 below

15

2 Motor-cars (other than those used in business of running them onhire) acquired or put to use on or after 1st April, 1990.

15

3 i. Aeroplane — Aeroengines 40

ii. Motor buses, Motor lorries and Motor taxiesused in a business of running them on hire.

30

iii. Commercial vehicle acquired on or after 1.10.1998 but before1.4.1999 and is put to use before 1.4.1999 for the purposes ofbusiness or profession.

40

iv. New commercial vehicle acquired on or after 1.10.1998 butbefore 1.4.1999 and is put to use before 1.4.1999 inreplacement of condemned vehicle of over 15 years ofage for the purpose of business or profession.

60

v. New commercial vehicle acquired on or after 1.4.1999 butbefore 1.4.2000 in replacement of condemned vehicle of over 15years of age and is put to use before 1.4.2000 for the purpose ofbusiness or profession.

60

vi. New commercial vehicles acquired on or after 1-4-2001 butbefore 1-4-2002 and is put to use before 1-4-2002 for thepurpose of business or profession.

50

vi.a)New commercial vehicle acquired on or after 1-1-2009 but50



before 1-4-2009 and put to use before 1-4-2009 for thebusiness or profession

vii. Moulds used in rubber and plastic goods factories 30

viii. Air pollution control equipments 100

ix. Water pollution control equipments 100

x. Solid waste control equipments 100

xi. P & M used in semi-conductor industry 30

xi.a)Life saving medical equipments(For Items refer to Rule 5 App. I)

40

4 Containers made of glass or plastic used as refills 50

5 Computers (including computer software) 60

6 Machinery and plants used in weaving processing, and garment sector

of textile industry purchased under TUFS on or after 1-4-2001 butbefore 1-4-2004 and is put to use before 1-4-2004

50

7&8.For other items of P & M refer to Rule 5 App. 1 100/80/60

9 i. Books owned by assessees carrying on a profession

a. Annual publication 100

b.Other books 60

ii. Books owned by assessees carrying on business in runninglending libraries

100

IV Ships

Refer to Rule-5 App.-I 20

V Intangible Assets

Knowhow, patents, copyrights, trademarks, licences, franchises orany other business or commercial rights of similar nature acquired onor after 1.4.1998.

25

NOTES :

1. Where an asset is put to use for less than 180 days in a previous year in which it is purchased, depreciation thereonshall be allowed at 50% of the depreciation allowable in respect of the block of asset comprising such asset.

2. Buildings include roads, bridges, culverts, wells and tubewells

3. Plant has been held to include:

movable partitions [Jarrold vs. John Good & Sons Ltd., 40 TC 681 (CA)]sanitary & pipeline fitting [CIT vs. Taj Mahal Hotel, 82 ITR 44 (SC)]ceiling and pedestal fans [CIT vs. Jagadees Chandran & Co., 75 ITR 697 (Mad.); Sundaram Motors Pvt.Ltd. vs. CIT, 71 ITR 587 (Mad.); CIT vs. Tarun Commercial Ltd., 151 ITR 75 (Guj)].wells [CIT vs. Warner Hindustan Ltd., 117 ITR 15 (AP)].hospital [CIT vs. Dr. B. Venkata Rao 111 Taxman 635 (SC)]. However, w.e.f. A.Y. 2004-05, it shall notinclude buildings, furniture and fittings.

4. Depreciation on assets acquired on hire purchase basis should be allowed to the hirer where the terms of theagreement provide that the equipment shall eventually become the property of the hirer or confer on the hirer an optionto purchase the equipment [Circular No. 9 (R. Dis. No. 27(4) - IT/43), dated 23-3-1943].

5. Depreciation in respect of motor car manufactured outside India acquired on or after 28-2-1975 or before 1-4-2001shall be allowed.

6. The claim of depreciation is mandatory w.e.f. A. Y. 2002-03 overriding Supreme Court’s decision in CIT vs.Mahendra Mills 109 Taxman 225 which held that the depreciation claim is optional.



7. Total depreciation allowable in the year of succession/ amalgamation/demerger, to predecessor/amalgamating/demerged co. and successor/amalgamated/resulting co. is to be restricted to depreciation allowable as if succession/amalgamation/demerger had not taken place, and such depreciation is to be apportioned on the basis of number of daysusage by each of them.

8. Depreciation is allowable even on jointly owned assets.

9. No amortisation benefits u/ss. 35A and 35AB can be claimed in respect of intangible assets.

10. In respect of depreciable assets employed in power projects, depreciation may be computed under the Straight

Line Method on individual assets [Rule 5(1A)] — [Appendix IA]. Alternatively, the undertaking, may at its option, alsoclaim depreciation at the normal rates (Rule 5(1) — Appendix I), subject to the option being exercised prior to the duedate of filing the return of income. In the event of sale or disposal of such assets, if the sale consideration.

i. is less than WDV of such assets– Balance (i.e., WDV – sale consideration) can be claimed asdepreciation, provided that such a deficiency is written off in the books.ii. is in excess of the WDV — Excess (to the extent of the difference between actual cost and WDV will betaxable as Business profit and the balance as Capital Gains)

11. Additional Depreciation @ 20% of actual cost of new machinery or plant (other than ships and aircrafts) acquiredand installed after 31st March, 2005 by an assessee engaged in the business of manufacture or production of an articleor thing shall be allowed on satisfying certain conditions.

Tags: Buildings, Furniture and fittings, income tax act, Machinery and plant, Rates of Depreciation

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Dhiti

KN.MUTHIAH wrote on 18 September, 2010, 13:50

Windmills are eligible for Accelerated depreciation at 80%.Presently if you want to get generation based incentiveyou are not eligible to claim accelerated depreciation.In this situation what is the normal rate of depreciation allowable for WINDMILLS.

Kindly give your advice and I will be thankful.

Uttam wrote on 22 September, 2010, 17:44

Pls send me format in excel sheet for depreciation calculation and how to calculate

Shraddha Rao wrote on 23 October, 2010, 19:33

Please inform me the tax suitabilities for the manufacturer of LED products where by the buyer is able to savepower by more than 60%.reply ASAP.

Amit Sharma wrote on 18 November, 2010, 12:03

Sir

I have a passenger cng auto i want to know that how is depriciation rate on it.

Thans


Dear sir


Thanks


Dear Sir

Please send me p.f calculation sheet in excel format.

Thans

PANKAJ KR NIMESH wrote on 4 December, 2010, 12:20

HOW DECIDE THAT RATE OF DEPRICIATION (COMPUTER DEP. 60%)

bhawna wrote on 21 December, 2010, 13:59

can you tell me celing fans will come under furnitures or in office equipments.tell the rates of dep plz.

vinod wrote on 21 December, 2010, 16:04

please send depriciation excel format sir

rahul wrote on 22 December, 2010, 17:18



please send me all fixassets depriciation rate for assessment year 2010-2011

Rohit Kumar wrote on 4 January, 2011, 16:00


MANISH wrote on 22 January, 2011, 12:51

wht rate of depriciation be charged on library books in case of college or trust?

malathesh wrote on 5 February, 2011, 14:37

Dear Sir,

Please reply me about the rate of depreciation on new factory building & plant & machinery under partnershipact, extensionof unit,thanking you,with regardsn.k.malathesh

Purvi wrote on 14 February, 2011, 18:11

Dear Sir,

At the time of Sell of any Fixed Asset we have to take depriciated value as pe Co’s act or as per Imcome taxact?

Is there any accounting practice that we have to maintain depriciation as per co’s act as well as as per incometax.

Kindly suggest.

Thanks & Regards.

rama wrote on 15 February, 2011, 12:29

what is the benefit of accelerated dep for a new biomass power company.what is its effect on tariff if any.

vipin wrote on 29 March, 2011, 17:27

in case of schools what will be the depreciation rate for sports items and books and periodicals for the A.Y.2010-11

Chandan Chaudhary wrote on 8 April, 2011, 12:06

please send the formula of calculate interest of RD Monthly Deposit

k kalirajan wrote on 11 April, 2011, 10:01

I’m K.Kalirajan from Trichirapalli, Tamil nadu . Interested to instaingl Solar Air conditioner for my home. When Irefer internet, benefit of income tax thro 100% depreciation is shown by some companies.. Is it for individualalso?Kindly clarify, if i install solar A/c for my home, am I eligible to claim this benefit?

Sudarshan Kale wrote on 12 April, 2011, 16:00

please send depriciation excel format sir (A Y 2011-12)



Shraddha wrote on 16 April, 2011, 13:34

Please confirm the rate of depreciation for Plant & Machinery used in manufacture of Solar Panel. Is it 80%

k nand kishore wrote on 22 April, 2011, 18:35

I learnt some where in books relating to Taxation in India that in case the value of depreciable asset is Rs. 5000or less depreciation can be claimed @ 100 % regardless of the category of the depreciable asset. Can any onegive a detailed clarification on this particular aspect of depreciation ?

pavithra wrote on 29 April, 2011, 12:18

Please replay me the rare of depreciation on star one hair in yellow board

vilas gondal wrote on 12 May, 2011, 11:36

What is the highest rate of Depreciation under Income Tax and for what items?please give chart

srinivasa reddy wrote on 13 May, 2011, 14:13

ur question not clear!, what star one hair?

Abhijit roy wrote on 19 May, 2011, 12:23

Please tell me the rate of depreciation of computer , as we know the depreciation rate is 33.33%.

Vivek Sharma wrote on 30 June, 2011, 19:31

The depreciation on computers as per Income Tax Act, 1961 is 60% under WDV method


Highest rate of depreciation is 100% for temporary wooden structure


If library is being used for business and profession, then 60% depreciation can be claimed . In case of periodicals100 depreciation can be used.

dinesh wrote on 15 July, 2011, 13:02

depreciation rate as per income tax law on fire fighting equipments

ajay rai wrote on 20 July, 2011, 15:33

tractors/spares ka vat percentage kya hai.

ajay rai wrote on 20 July, 2011, 15:36

sir,

plz send vat form 24 and vat charge on tractors.

mansi wrote on 20 July, 2011, 22:05

if i am a sports professional:



a. Which return would i use – ITR 4?b. my sports equipments would be classified as assetsc. what rate of depreciation would apply on same

NEERAJ UPPAL wrote on 11 September, 2011, 14:53

Please send me rates of depreciation for the Financila Year 2010-11 & All rates of VAT & VAT 24 Form

Thanking You

NEERAJ UPPALGURDASPUR

Purnachandra Prasad wrote on 13 September, 2011, 17:31

Can we claim depreciation for a lease hold land ?Please reply

ThanksPrasad

kumar wrote on 17 September, 2011, 9:58

Refer,Your state Biomass tariff schedule given by the concerned Renewable Dept.There you will get the details ofAccelerated Depreciation information.

Md Mobarak Hussain wrote on 19 October, 2011, 22:15

Dear sir ,

pls explain me how to calculate the depreciation ….

and pls explain what is the difference between IT Depreciation & Company Act Depreciation and which isbetter..

pls reply soon

shree wrote on 27 October, 2011, 15:46

how to calculate the actual amount of fixed assets, actual balance sheet amount is 1,50,000/- i don’t know 10 %how it calculate i want actual 10 % depreciation amount please suggest me sir

Dipak Mehta wrote on 14 November, 2011, 15:18

shall i know from which year the rate of depreciation changed from 33.33% to 25% on plant and machinery?please consider my request.

Dipak Mehta wrote on 14 November, 2011, 15:25

Dear Sir, shall i kknow from which year the rate of depreciation changed from 33.33% to 25% on plant &machinary? please consider my request.Thank You.

Arun wrote on 17 November, 2011, 20:28

Yes. It is allowed at 100% provided the cost of aquisition of the asset is not more the Rs.5,000/-

Preetam Singh wrote on 25 November, 2011, 15:10



hi Sir/MemI Want To understand the depreciation So plz sir Some knowledge provide me.

SACHIN NALAWADE wrote on 10 December, 2011, 17:36

Respected Sir /Madam

I Want to required all details of those assets are applicable or not applicable for Depreciation(with Current Rate)

b senapati wrote on 18 December, 2011, 16:38

Sir,My company purchased a car on 4/2/2005 which is being used by me for Rs 324431\- . What will be itsdepreciation value as per Income tax rules as on 04/02/2008?

Can you send the reply?

Thanks,

Anjali Devraj wrote on 23 December, 2011, 13:29

i need the depreciation rate according to income tax act and companies act in excel sheet on every assets andhow to calculate to it…………

Abhay Yadav wrote on 16 January, 2012, 14:31

What would be the depreciation rate to be taken in the case of books owned by college.

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Rates of Depreciation as Per Income Tax Act for a.Y

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