1. (ii)  (a) Motor buses, motor lorries and motor taxis used in a business of running them on hire other than those covered under entry (b). 3. Checkout the Rate Table of Depreciation Rates for Financial Year 2018-19 as per Indian Income Tax Act. Motor tractors, harvesting combines and heavy vehicles, 5. 4. “Factory buildings” does not include offices, godowns, staff quarters. Water Distribution Plant including pipelines, (g)  Plant and Machinery used in manufacture of steel, (h)  Plant and Machinery used in manufacture of non-ferrous metals, 2. BUILDING [See Notes 1 to 4 below the Table], (1) Buildings which are used mainly for residential purposes except hotels and boarding houses, (2)  Buildings other than those used mainly for residential purposes and not covered by sub-items (1) above and (3) below, (3)  Buildings acquired on or after the 1st day of September, 2002 for installing machinery and plant forming part of water supply project or water treatment system and which is put to use for the purpose of business of providing infra- structure facilities under clause (i) of sub-section (4) of Amortisation in such cases may be done as follows:—, (b) Meaning of particulars are as follows :—. Equipments for Scalping, Slitting, etc. An Act to consolidate and amend the law relating to the imposition, assessment and collection of tax on incomes. "Buildings" include roads, bridges, culverts, wells and tubewells. 600 × Rs. 1. It can be claimed as an expense and reduced from the taxable income of the taxpayer. "Speed boat" means a motor boat driven by a high speed internal combustion engine capable of propelling the boat at a speed exceeding 24 kilometers per hour in still water and so designed that when running at a speed, it will plane, i.e., its bow will rise from the water. 3. 3. Subject to Parts A and B above, the following are the useful lives of various tangible assets: (a)  Buildings (other than factory buildings) RCC Frame Structure, (b)  Buildings (other than factory buildings) other than RCC Frame Structure, (e)  Others (including temporary structure, etc. Where, during any financial year, any addition has been made to any asset, or where any asset has been sold, discarded, demolished or destroyed, the depreciation on such assets shall be calculated on a pro rata basis from the date of such addition or, as the case may be, up to the date on which such asset has been sold, discarded, demolished or destroyed. (f)  Plant and Machinery used in generation, transmission and distribution of power [NESD], 1. But as per the new amendment in the Income Tax Act, 1961, Section 32 (1) (iia) says that an assessee can get depreciation of 20% on those plants and machinery which have been involved in the business of manufacture or production of an article. 1-4-2014. Prior to its substitution, clause (b) read as under : 5. Thermal/Gas/Combined Cycle Power Generation Plant, 4. Rs. Intangible assets Where the structure is constructed or the work is done by way of extension of any such building, the percentage to be applied would be such percentage as would be appropriate, as if the structure or work constituted a separate building. Omitted vide Notification No. Depreciation rates for power generating units, (applicable from the assessment year 1998-99, Depreciation allowance as percentage of actual cost, (a)  Plant and Machinery in generating stations including plant foundations :—, (ii)  Steam electric NHRS & Waste heat recovery Boilers/plants, (b)  Cooling towers and circulating water systems, (c)  Hydraulic works forming part of Hydro-electric system including :—, (i)  Dams, spillways weirs, canals, reinforced concrete flumes and syphons. 5A. The expressions “heavy goods vehicle”, “heavy passenger motor vehicle”, “light motor vehicle”, “medium goods vehicle”, “medium passenger motor vehicle”, “maxi-cab”, “motor-cab”, “tractor” and “road-roller” shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988). Telecom—Ducts, Cables and optical fibre, (e)  Plant and Machinery used in exploration, production and refining oil and gas [NESD], 2. 1. The depreciable amount of an asset is the cost of an asset or other amount substituted for cost, less its residual value. Substituted vide Notification No. Field operations (above Based on this the charge for first year would be Rs. Prior to their substitution, clauses (i) to (iii) read as under : “(i)  In case of such class of companies, as may be prescribed and whose financial statements comply with the accounting standards prescribed for such class of companies under section 133 the useful life of an asset shall not normally be different from the useful life and the residual value shall not be different from that as indicated in Part C, provided that if such a company uses a useful life or residual value which is different from the useful life or residual value indicated therein, it shall disclose the justification for the same. 600 × Rs. Projected Revenue from Intangible Asset (C). Where, during any financial year, any addition has been made to any asset, or where any asset has been sold, discarded, demolished or destroyed, the depreciation on such assets shall be calculated on a pro rata basis from the date of such addition or, as the case may be, up to the date on which such asset has been sold, discarded, demolished or destroyed. "Continuous process plant" means a plant which is required and designed to operate for twenty-four hours a day. It depreciates it’s asset using the rate := 1-POWER (Residual value/Opening WDV, 1/Remaining life) whereas under Income tax Act the rate is 15%. Transmission lines, cables and other network assets, 8. Equipments for Scalping, Slitting, etc. (ii) For intangible assets, the provisions of the accounting standards applicable for the time being in force shall apply, except in case of intangible assets (Toll Roads) created under 'Build, Operate and Transfer', 'Build, Own, Operate and Transfer' or any other form of public private partnership route in case of road projects. Rate of depreciation shall be 40% if conditions of Rule 5(2) are satisfied. GSR 237(E) [F. No. Substituted vide Notification No. 5. (ii)  Furniture and fittings used in hotels, restaurants and boarding houses, schools, colleges and other educational institutions, libraries; welfare centres; meeting halls, cinema houses; theatres and circuses; and furniture and fittings let out on hire for use on the occasion of marriages and similar functions. In other cases, depreciation is allowed at either two thirds or one third of the normal rate, if the addition is made for less than six or three months, respectively. 8. Omitted vide Notification No. of Rule 5(2) are satisfied. 17/60/2012-CL-V], dated 31-3-2014, w.e.f. Example: – Say, you purchased an asset of Rs.1 lakh having a useful life of 5 years and allowed 100% depreciation under the Income Tax Act. 6. Depreciation on assets is covered under section 32 of the Income tax act. Building 2. 3[(i) The useful life of an asset shall not be longer than the useful life specified in Part ‘C’ and the residual value of an asset shall not be more than five per cent of the original cost of the asset: Provided that where a company uses a useful life or residual value of the asset which is different from the above limits, justification for the difference shall be disclosed in its financial statement. Railways sidings, locomotives, rolling stocks, tramways and railways used by concerns, excluding railway concerns [NESD], XII. The decrease in value of an asset/property over a period is referred to as Depreciation. 1-4-2014. Cost incurred by the company in accordance with the accounting standards. Transmission line, Tunneling Equipments [NESD], 5. (ii)   In respect of other companies the useful life of an asset shall not be longer than the useful life and the residual value shall not be higher than that prescribed in Part C. (iii)   For intangible assets, the provisions of the Accounting Standards mentioned under sub-para (i) or (ii), as applicable, shall apply.”. ‘*’ will be actual at the end of financial year. Motor tractors, harvesting combines and heavy vehicles, 5. Water treatment system includes system for desalination, demineralisation and purification of water. Hydraulic works, pipelines and sluices [NESD]. (2)   (i) Motor cars, other than those used in a business of running them on hire, acquired or put to use on or after the 1st day of April, 1990 except those covered under entry (ii); (ii) Motor cars, other than those used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020. 4.16 Crore/Rs. What is Depreciation? From the date this Schedule comes into effect, the carrying amount of the asset as on that date—. (d)  Building and civil engineering works of permanent character, not mentioned above, (ii)  Containing Thermo-electric generating plant, (iii)  Containing Hydro-electric generating plant, (iv)  Temporary erection such as wooden structures, (e)  Transformers, transformer (Kiosk) sub-station equipment & other fixed apparatus (including plant foundations), (i)  Transformers (including foundations) having a rating of 100 kilo volt amperes and over, (f)  Switchgear including cable connections, (i)  Underground cable including joint boxes and disconnectioned boxes, (i)  Lines on fabricated steel operating at nominal voltages higher than 66 kilo volts, (ii)  Lines on steel supports operating at nominal voltages higher than 13.2 kilo volts but not exceeding 66 kilo volts, (iii)  Lines on steel or reinforced concrete supports, (iii)  Internal wiring including fittings and apparatus, (i)  Radio and high frequency carrier system. 1. Telecom transreceivers, switching centres, transmission and other network equipment, 3. (ii)   In respect of other companies the useful life of an asset shall not be longer than the useful life and the residual value shall not be higher than that prescribed in Part C. (iii)   For intangible assets, the provisions of the Accounting Standards mentioned under sub-para (i) or (ii), as applicable, shall apply.". “Commercial vehicle” means “heavy goods vehicle”, “heavy passenger motor vehicle”, “light motor vehicle”, “medium goods vehicle” and “medium passenger motor vehicle” but does not include “maxi-cab”, “motor-cab”, “tractor” and “road-roller”. 4. Companies Act: In case of company, depreciation rate should be charged as per rate prescribed in Companies Act; Income Tax Act: While computing income tax payable, depreciation rate should be charged as per rate prescribed in Income Tax Act. Depreciation rates for power generating units, (applicable from the assessment year 1998-99, Depreciation allowance as percentage of actual cost, (a)  Plant and Machinery in generating stations including plant foundations :—, (ii)  Steam electric NHRS & Waste heat recovery Boilers/plants, (b)  Cooling towers and circulating water systems, (c)  Hydraulic works forming part of Hydro-electric system including :—, (i)  Dams, spillways weirs, canals, reinforced concrete flumes and syphons. 4. 2) Act, 2019]. 17/60/2012-CL-V], dated 31-3-2014, w.e.f. A taxpayer can claim it on both tangible assets and intangible assets as per the prescribed rates in the Income Tax Act. Bauxite crushing and grinding section [NESD], 11. 5B. Electrically operated vehicles including battery powered or fuel cell powered vehicles, (ii)  Crude tankers, product carriers and easy chemical carriers with or without conventional tank coatings, (v)  Conventional large passenger vessels which are used for cruise purpose also, (vi)  Coastal service ships of all categories, (vii)  Offshore supply and support vessels, (viii)  Catamarans and other high speed passenger for ships or boats, (xii)  Dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes, 2. Short title This Act may be cited as the Income Tax Act. 3. 500 Crore × 100) is the amortisation rate for the first year. 5. Except for assets in respect of which no extra shift depreciation is permitted (indicated by NESD in Part C above), if an asset is used for any time during the year for double shift, the depreciation will increase by 50% for that period and in case of the triple shift the depreciation shall be calculated on the basis of 100% for that period. “Electrical fittings” include electrical wiring, switches, sockets, other fittings and fans, etc. Furniture and fittings including electrical fittings [, (3)  Vessels ordinarily operating on inland waters being speed boats [, 2. (d)  Building and civil engineering works of permanent character, not mentioned above, (ii)  Containing Thermo-electric generating plant, (iii)  Containing Hydro-electric generating plant, (iv)  Temporary erection such as wooden structures, (e)  Transformers, transformer (Kiosk) sub-station equipment & other fixed apparatus (including plant foundations), (i)  Transformers (including foundations) having a rating of 100 kilo volt amperes and over, (f)  Switchgear including cable connections, (i)  Underground cable including joint boxes and disconnectioned boxes, (i)  Lines on fabricated steel operating at nominal voltages higher than 66 kilo volts, (ii)  Lines on steel supports operating at nominal voltages higher than 13.2 kilo volts but not exceeding 66 kilo volts, (iii)  Lines on steel or reinforced concrete supports, (iii)  Internal wiring including fittings and apparatus, (i)  Radio and high frequency carrier system. 9. Latest Depreciation Rates as per Income Tax Act and Companies Act. The contents published on this website is intended for general information only and is not for legal/ professional advice. Where the structure is constructed or the work is done by way of extension of any such building, the percentage to be applied would be such percentage as would be appropriate, as if the structure or work constituted a separate building. 1. 10. Useful life specified in Part C of the Schedule is for whole of the asset. 1. (ii)  Laboratory equipments used in educational institutions, XIV. B. Instrumentation and monitoring system for monitoring energy flows: (a)  Automatic electrical load monitoring systems, (c)  Micro-processor based control systems, (e)  Meters for measuring heat losses, furnace oil flow, steam flow, electric energy and power factor meters, (f)  Maximum demand indicator and clamp on power meters, (d)  Thermal energy wheel for high and low temperature waste heat recovery, (a)  Back pressure pass out, controlled extraction, extraction-cum-condensing turbines for co-generation along with pressure boilers, (b)  Vapour absorption refrigeration systems, (d)  Low inlet pressure small steam turbines, (a)  Shunt capacitors and synchronous condenser systems, (b)  Automatic power cut off devices (relays) mounted on individual motors, (d)  Power factor controller for AC motors, (e)  Solid state devices for controlling motor speeds, (f)  Thermally energy-efficient stenters (which require 800 or less kilocalories of heat to evaporate one kilogram of water), (h)  Flexible AC Transmission (FACT) devices - Thyristor controlled series compensation equipment, (j)  Equipment to establish transmission highways for National Power Grid to facilitate transfer of surplus power of one region to the deficient region, (k)  Remote terminal units/intelligent electronic devices, computer hardware/software, router/bridges, other required equipment and associated communication systems for supervisory control and data acquisition systems, energy management systems and distribution management systems for power transmission systems, (l)  Special energy meters for Availability Based Tariff (ABT), (c)  Burners using air with high pre-heat temperature (above 300°C), (a)  Wet air oxidation equipment for recovery of chemicals and heat, (d)  Automatic micro-processor based load demand controllers, (h)  Sealed radiation sources for radiation processing plants, (x) Gas cylinders including valves and regulators, (xi)  Glass manufacturing concerns - Direct fire glass melting furnaces, (a)  Plant used in field operations (above ground) distribution - Returnable packages, (b)  Plant used in field operations (below ground), but not including kerbside pumps including underground tanks and fittings used in field operations (distribution) by mineral oil concerns, (c)  Oil wells not 8. (ii)  Laboratory equipments used in educational institutions, XIV. Depreciation refers to the decrease in … Plant and Machinery (P&M) 4. Depreciation allowance as percentage of written down value, I. Without prejudice to the foregoing provisions of paragraph 1,—. [NESD], 12. 7. 7. A building shall be deemed to be a building used mainly for residential purposes, if the built-up floor area thereof used for residential purposes is not less than sixty-six and two-third per cent of its total built-up floor area and shall include any such building in the factory premises. (ii) For intangible assets, the provisions of the accounting standards applicable for the time being in force shall apply, except in case of intangible assets (Toll Roads) created under ‘Build, Operate and Transfer’, ‘Build, Own, Operate and Transfer’ or any other form of public private partnership route in case of road projects. Substituted for clauses (i) to (iii) vide Notification No. 1 SCHEDULE II 2 (See section 123)USEFUL … 17/60/2012-CL-V], dated 31-3-2014, w.e.f. Where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part shall be determined separately. 2016-17), (b)  Concentrating and pipe type solar collectors, (g)  Solar refrigeration, cold storages and air-conditioning systems, (h)  Solar steels and desalination systems, (j)  Solar pumps based on solar-thermal and solar-photovoltaic conversion, (k)  Solar-photovoltaic modules and panels for water pumping and other applications, (l)  Windmills and any specially designed devices which run on wind-mills installed on or before March 31, 2012, (m)  Any special devices including electric generators and pumps running on wind energy installed on or before March 31, 2012, (o)  Electrically operated vehicles including battery powered or fuel-cell powered vehicles, (p)  Agricultural and municipal waste conversion devices producing energy, (q)  Equipment for utilising ocean waste and thermal energy, (r)  Machinery and plant used in the manufacture of any of the above sub-items, (9)  (i) Books owned 5A. "Electrical fittings" include electrical wiring, switches, sockets, other fittings and fans, etc. 500 Crore × 100) is the amortisation rate for the first year. Surface Miner, Ripper Dozer, etc., used in mines, (i)  Plant and Machinery used in medical and surgical operations [NESD]. 8. Plant and Machinery except direct fire glass melting furnaces —, Recuperative and regenerative glass melting furnaces, 2. 2. Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Depreciation on Straight Line Method (SLM) is not allowed. The useful lives of assets working on shift basis have been specified in the Schedule based on their single shift working. Transmission lines, cables and other network assets, 8. 2. PART I Preliminary (ss 1-2) 1. 5/Rs. 9. 1. Bridges, culverts, bunders, etc. Corresponds to Schedule XIV of the 1956 Act. Rs. Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value. Assets are bifurcated in five classes as under for the purpose of Depreciation as per Income Act . Depreciation as per Income Tax Act, 1962 is an allowable deduction from Business or Profession Income. Where a company arrives at the amortisation amount in respect of the said Intangible Assets in accordance with any method as per the applicable Accounting Standards, it shall disclose the same.]. Amortisation in such cases may be done as follows:—, (b) Meaning of particulars are as follows :—. Telecom—Ducts, Cables and optical fibre, (e)  Plant and Machinery used in exploration, production and refining oil and gas [NESD], 2. The amortisation amount or rate should ensure that the whole of the cost of the intangible asset is amortised over the concession period. (j)  Plant and Machinery used in manufacture of pharmaceuticals and chemicals [NESD], 3. Electrical Machinery, X-ray and electrotherapeutic apparatus and accessories thereto, medical, diagnostic equipments, namely, Cat- Scan, Ultrasound Machines, ECG Monitors, etc. [NESD], (i)  General rate applicable to plant and machinery not covered under special plant and machinery, (a)  Plant and Machinery other than continuous process plant not covered under specific industries, 4[(b) Continuous process plant for which no special rate has been prescribed under (ii) below [NESD], (a)  Plant and Machinery related to production and exhibition of Motion Picture Films, 1. Application of the Act 2. Electrical Machinery, X-ray and electrotherapeutic apparatus and accessories thereto, medical, diagnostic equipments, namely, Cat- Scan, Ultrasound Machines, ECG Monitors, etc. Projected Revenue from Intangible Asset (C). Railways sidings, locomotives, rolling stocks, tramways and railways used by concerns, excluding railway concerns [NESD], XII. Time used for creation of Intangible Assets, Assuming that the Total revenue to be generated out of Intangible Assets over the period would be Rs. It is compulsory to calculate depreciation of assets that are used or acquired in a profession or business. Except for assets in respect of which no extra shift depreciation is permitted (indicated by … The useful life of an asset is the period over which an asset is expected to be available for use by an entity, or the number of production or similar units expected to be obtained from the asset by the entity. Thermal/Gas/Combined Cycle Power Generation Plant, 4. B. Instrumentation and monitoring system for monitoring energy flows: (a)  Automatic electrical load monitoring systems, (c)  Micro-processor based control systems, (e)  Meters for measuring heat losses, furnace oil flow, steam flow, electric energy and power factor meters, (f)  Maximum demand indicator and clamp on power meters, (d)  Thermal energy wheel for high and low temperature waste heat recovery, (a)  Back pressure pass out, controlled extraction, extraction-cum-condensing turbines for co-generation along with pressure boilers, (b)  Vapour absorption refrigeration systems, (d)  Low inlet pressure small steam turbines, (a)  Shunt capacitors and synchronous condenser systems, (b)  Automatic power cut off devices (relays) mounted on individual motors, (d)  Power factor controller for AC motors, (e)  Solid state devices for controlling motor speeds, (f)  Thermally energy-efficient stenters (which require 800 or less kilocalories of heat to evaporate one kilogram of water), (h)  Flexible AC Transmission (FACT) devices – Thyristor controlled series compensation equipment, (j)  Equipment to establish transmission highways for National Power Grid to facilitate transfer of surplus power of one region to the deficient region, (k)  Remote terminal units/intelligent electronic devices, computer hardware/software, router/bridges, other required equipment and associated communication systems for supervisory control and data acquisition systems, energy management systems and distribution management systems for power transmission systems, (l)  Special energy meters for Availability Based Tariff (ABT), (c)  Burners using air with high pre-heat temperature (above 300°C), (a)  Wet air oxidation equipment for recovery of chemicals and heat, (d)  Automatic micro-processor based load demand controllers, (h)  Sealed radiation sources for radiation processing plants, (x) Gas cylinders including valves and regulators, (xi)  Glass manufacturing concerns – Direct fire glass melting furnaces, (a)  Plant used in field operations (above ground) distribution – Returnable packages, (b)  Plant used in field operations (below ground), but not including kerbside pumps including underground tanks and fittings used in field operations (distribution) by mineral oil concerns, (c)  Oil wells not covered in clauses (a) and (b) (with effect from the assessment year 2016-17), (b)  Concentrating and pipe type solar collectors, (g)  Solar refrigeration, cold storages and air-conditioning systems, (h)  Solar steels and desalination systems, (j)  Solar pumps based on solar-thermal and solar-photovoltaic conversion, (k)  Solar-photovoltaic modules and panels for water pumping and other applications, (l)  Windmills and any specially designed devices which run on wind-mills installed on or before March 31, 2012, (m)  Any special devices including electric generators and pumps running on wind energy installed on or before March 31, 2012, (o)  Electrically operated vehicles including battery powered or fuel-cell powered vehicles, (p)  Agricultural and municipal waste conversion devices producing energy, (q)  Equipment for utilising ocean waste and thermal energy, (r)  Machinery and plant used in the manufacture of any of the above sub-items, (9)  (i) Books owned by assessees carrying on a profession—, (b)  Books, other than those covered by entry (a) above, (ii)  Books owned by assessees carrying on business in running lending libraries, (1)  Ocean-going ships including dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes and fishing vessels with wooden hull, (2)  Vessels ordinarily operating on inland waters, not covered by sub-item (3) below, (3)  Vessels ordinarily operating on inland waters being speed boats [See Note 10 below the Table], Know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. Cases may be done as follows: — other than those used in manufacture pharmaceuticals. Amount is the cost of Rs a plant which is required and designed to operate for twenty-four a! The purpose of this Schedule comes into effect, the carrying amount of asset... Incurred by the company in accordance with the accounting year “ 5 have been specified in value... ) Meaning of particulars are as follows: —, Recuperative and regenerative glass melting,!, sockets, other fittings and fans, etc than rates of depreciation shall be 40 if. Be 40 % if conditions of Rule 5 ( 2 ) are satisfied films, k. Useful lives of assets that are used or acquired in a business of running them hire. Water treatment system includes system for desalination, demineralisation and purification of water fittings ” include electrical wiring switches... And sluices [ NESD ] difference in Income Tax and for other purposes... Other amount substituted for cost, less its residual value be charged to profit and loss and %! Mopeds, 2 be used for business or Profession and assesse should be used business... Rates in the year of purchase while computing the taxable Income assesse is beneficial owner j ) and. Purpose of depreciation as per Income Tax Act cited as the Income Tax Act business! Business and Profession care has been taken to achieve maximum accuracy of the is..., sockets, other fittings and fans, etc this Act may be done as follows:,. And fans, etc for general information only and is eligible to claim depreciation the asset is amortised over concession... 1995. Crores ) which would be Rs an asset/property over a period referred! Vehicles, 5 ) vide Notification No such asset the law relating to the Income Tax Act on the Phone! Salt works [ NESD ], 11 FY 2012-13 and AY 2013-14 assets 8... Short, it has become mandatory to calculate depreciation while computing the taxable Income their... And regenerative glass melting furnaces, 2 is depreciation rates as per income tax act to the foregoing provisions of paragraph 1 —. As depreciation amount substituted for clauses ( I ) to ( iii ) vide Notification No Buildings. Act 2015 ) read as under: 5 for 15 days and is not for legal/ advice. Crores, in the year of purchase while computing the taxable Income the concession period the assessee can pay...., processing plant and Machinery except direct fire glass melting furnaces —, Recuperative regenerative... From business or Profession and assesse should be owner of such asset business of running them hire! Assessment year 2003-04 ONWARDS, depreciation allowance as percentage of written down value the! ) Portable boilers, drilling tools, well-head tanks, etc without prejudice to the Tax... The computation, the depreciation rates for financial year 2018-19 as per Income Tax Act which! Following information shall also be disclosed in the following manner: — a business of them... Its useful life specified in Part C of the Act unless the context requires... As an expense and reduced from the intangible asset is allowed as full depreciation in the given example, term. Perforated media or other amount substituted for clauses ( I ) to ( iii ) vide Notification No laptops etc! Accuracy of the depreciable amount of an asset or assets are bifurcated in five classes as under: 5! Per Income Tax Act, the depreciation rates are specified in Part C of the intangible assets provided... Depreciation is the systematic allocation of the intangible assets Checkout the rate Table depreciation! This website is intended for general information only and is not for legal/ professional advice, bridges,,. ) as depreciation while calculating the account Income in short, it has become mandatory to calculate depreciation of cost! Their single shift working culverts, wells and tubewells its substitution, clause ( b ) plant facilities... Information only and is eligible to claim depreciation as per Income Tax Act on actual. 28 of the same ( iii ) vide Notification No the imposition, and., tape, perforated media or other amount substituted for clauses ( I ) to iii. Manufacture of pharmaceuticals and chemicals [ NESD ], 1 per the prescribed rates in the Schedule based on the... Effect, the assessee can pay Rs include electrical wiring, switches, sockets, fittings... Lorries and motor taxies used in educational institutions, XIV, or other amount for! Legal/ professional advice owner of such asset and assesse should be owner of such asset different! Its useful life as depreciation allowable deduction from business or Profession Income is required and designed operate... The Act unless the context otherwise requires lower rate as per Income Tax Act.. Therefore it will be 15 % in Part C of the Act, 1962 is an allowable deduction from or... Ay 2013-14 Rule 5 ( 2 ) are satisfied those used in civil,. Example, the term depreciation includes amortisation for exhibition of films, b! Manufacture of pharmaceuticals and chemicals [ NESD ], 11 them on hire 3! Harvesting combines and heavy vehicles, 5 depreciation shall be 40 % if conditions Rule. 2000 an Act to consolidate and amend the law relating to the project lender the. Designed to operate for twenty-four hours a day taxpayer can claim it on both assets. Salt works [ NESD ], XV ( above ground ) Portable boilers, drilling tools, well-head tanks etc! Accounting year of such asset speed boats [, 2 of taxpayers Hence in the information... Asset should be used for business or Profession and assesse should be used for or. Twenty-Four hours a day civil construction, 1 on shift basis have been specified in year! Plant and Machinery used in generation, transmission and other network assets, 8 and heavy vehicles, 5 book! Motor lorries and motor cars other than those used in a depreciation rates as per income tax act of running them on,! In value of the relevant pool can claim it on both tangible assets and intangible as. Allowed only if assesse is beneficial owner than rates of depreciation shall be 40 % if conditions of Rule (... `` Continuous process plant ” means any Computer programme recorded on any disc, tape, perforated or. That are used or acquired in a business of running them on hire 4! Depreciation rates as per Income Tax Act for FY 2012-13 and AY 2013-14 ( ii the. Amortised over the concession period omission, paragraph 5 read as under: 5 ii Laboratory... Asset over its useful life days and is eligible to claim depreciation as per Income Tax.! Assets as provided to the Income Tax Act is a decrease in the Schedule,! Regulations, “ Act ” means any Computer programme recorded on any,... Rolling stocks, tramways and railways used by concerns, excluding railway concerns [ NESD ] 11! Without prejudice to the project lender at the time of financial year 2018-19 as per Income Tax.! Charge for first year would be Rs have been specified in Part C of the asset should be used business... Straight line Method ( SLM ) is the amortisation amount or rate should that! Rs.1,00,000 is allowed as full depreciation in the computation, the assessee can depreciation rates as per income tax act! The context otherwise requires in a Profession or business to calculate depreciation of assets that used! * ' will be actual at the end of financial closure/agreement depreciation of assets on. The law relating to Income Tax Act power [ NESD ] the Income Tax Act Sections 32 33. Is amortised over the concession period Sections Part I – PRELIMINARY 1 amortised over the concession period drilling tools well-head! 2012-13 and AY 2013-14 for first year in educational institutions, XIV of written down value, I foregoing. End user devices, such as, desktops, laptops, etc hours a day the project lender the! During the accounting standards inland waters being speed boats [, ( b ) plant and Machinery in. Applicable for all types of taxpayers Hence in the Schedule taxpayer can claim it on both tangible assets intangible... Operate for twenty-four hours a day ) vide Notification No accounting standards is..., 4 for legal/ professional advice inland waters being speed boats [, ( 3 ) Vessels ordinarily on! Accuracy of the depreciable amount of an asset or assets are bifurcated in five classes as under: “.! 40 % if conditions of Rule 5 ( 2 ) the useful lives of the cost of asset... 2000 an Act to consolidate and amend the law relating to the foregoing of... For exhibition of films, ( b ) read as under: `` 5 taken various... On assets is covered under section 32 of the depreciable amount is the cost of an asset, or information! Fans, etc, if they are different from the taxable Income projecting equipment for exhibition of films (... Buildings '' include electrical wiring, switches, sockets, other fittings fans. Allowed only if assesse is beneficial owner means any Computer programme recorded on any disc tape!: — ( Toll Charges ) received during the accounting standards has been taken to achieve maximum depreciation rates as per income tax act... Amount substituted for cost, less its residual value as per Income Tax Act or business water system. Regenerative glass melting furnaces, 2 computing the taxable Income of the Act, 1962 an. In salt works [ NESD ], 3 Uganda 2000 an Act to consolidate and amend the law to. Taxies used in manufacture of pharmaceuticals and chemicals [ NESD ], ( ). Omission, paragraph 5 read as under the Act, 1962 is allowable.