{"id":4692,"date":"2021-10-13T01:00:21","date_gmt":"2021-10-13T01:00:21","guid":{"rendered":"https:\/\/www.kanakkupillai.com\/new-learn?p=4692"},"modified":"2026-01-29T10:46:07","modified_gmt":"2026-01-29T05:16:07","slug":"depreciation-under-income-tax-act","status":"publish","type":"post","link":"https:\/\/www.kanakkupillai.com\/learn\/depreciation-under-income-tax-act\/","title":{"rendered":"Depreciation under Income Tax Act"},"content":{"rendered":"<p>Depreciation as per the slab rates mentioned in the Income Tax Act is allowable expenditure against the profits or gains from the business or profession. Depreciation under the Income Tax Act is a deduction allowed for the reduction in the real value of a tangible or intangible asset used by a taxpayer.<\/p>\n<h2>Depreciation<\/h2>\n<p>Depreciation refers to reduction in the value of asset over a period of time. The main causes of depreciation are the usage, wear and tear and obsolescence of the asset. Since assets are used in the business\/profession therefore some amount of such asset can be logically debited to the Profit and Loss Account as a non cash expenditure and is an allowable expense.<\/p>\n<p>Depreciation\u00a0is allowable as expense in\u00a0Income Tax Act,\u00a01961 on\u00a0basis of block of assets\u00a0on\u00a0Written Down Value (WDV) method.\u00a0Depreciation on\u00a0Straight Line Method (SLM) is not allowed. Block of assets means group of assets falling within\u00a0a\u00a0class of assets\u00a0for\u00a0which same rate of\u00a0depreciation\u00a0is prescribed.<\/p>\n<h2>Which Depreciation Method Is Used for Tax Purposes?<\/h2>\n<p>The financial depreciation is calculated using the straight-line method which results in an even distribution of the expense over the life of the asset, tax depreciation is calculated using the Modified Accelerated Cost Recovery System, or MACRS. You divide the cost of an asset, minus its salvage value, over its useful life. That determines how much depreciation you deduct each year.<\/p>\n<h2>Conditions for claiming depreciation<\/h2>\n<ul>\n<li>Condition 1: The asset must be owned by the assessee. (If partly owned, proportionate depreciation is allowed as a deduction)<\/li>\n<li>Condition 2: It must be used for business or a profession.<\/li>\n<li>Condition 3: It should be used during the relevant previous year.If asset is not put to use in the year of purchase or put to use for less than 180 days even then full depreciation is allowed in the subsequent years if Depreciation is allowed on whole block of asset even if only a single asset in that block is used during the year at any point of time.<\/li>\n<li>Condition 4: Depreciation is available on tangible as well as intangible assets (Note: Goodwill and land are not eligible for depreciation)<\/li>\n<\/ul>\n<h2>Methods of Depreciation<\/h2>\n<p>Depreciation is a mandatory deduction in the profit and loss statements of an entity, and the Act allows deduction either in the Straight-Line method or the written-down value (WDV) method. (WDV is a widely used mechanism except in the power generation units.)<\/p>\n<ul class=\"i8Z77e\">\n<li class=\"TrT0Xe\">Straight-Line\u00a0Depreciation.<\/li>\n<li class=\"TrT0Xe\">Declining Balance\u00a0Depreciation.<\/li>\n<li class=\"TrT0Xe\">Sum-of-the-Years\u2019 Digits\u00a0Depreciation.<\/li>\n<li class=\"TrT0Xe\">Units of Production\u00a0Depreciation.<\/li>\n<\/ul>\n<h3>Block of assets concept<\/h3>\n<p>Depreciation is calculated on the WDV of a Block of assets. A block of assets is a group of assets falling within a class of assets comprising:<\/p>\n<ul>\n<li>Tangible asset<\/li>\n<li>Intangible asset<\/li>\n<\/ul>\n<p>These may be further classified based on similar use, life, and nature of the asset.<\/p>\n<h3>Written Down Value \u2013Meaning<\/h3>\n<p>In the context of computing depreciation, it is important to understand the meaning of the terms \u2018WDV\u2019 & \u2018Actual Cost. WDV under the <a href=\"https:\/\/www.kanakkupillai.com\/income-tax-return-filing\"><span style=\"color: #0000ff;\"><strong>Income <\/strong><\/span><span style=\"color: #0000ff;\"><b>Tax Return Filing<\/b><\/span>:<\/a><\/p>\n<p>Where the asset is acquired in the previous year, the actual cost of the asset shall be treated as WDV<br \/>\nWhere the asset is acquired in an earlier year, the WDV shall be equal to the actual cost incurred, less depreciation allowed under the Act<\/p>\n<h2>Calculation of Depreciation<\/h2>\n<table>\n<tbody>\n<tr>\n<td width=\"480\"><strong>Particulars<\/strong><\/td>\n<td width=\"136\"><strong>Amount<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"480\">Aggregate of WDV of all the assets falling within<br \/>\nThat block at the beginning of the year<\/td>\n<td width=\"136\">XXX<\/td>\n<\/tr>\n<tr>\n<td width=\"480\">Add: Actual cost of any assets falling within the block<br \/>\nacquired during\u00a0the previous year<\/td>\n<td width=\"136\">XXX<\/td>\n<\/tr>\n<tr>\n<td width=\"480\">Less: Money received or receivable in respect of any<br \/>\nasset in the block, which is sold, discarded, or demolished<br \/>\nor destroyed during the previous\u00a0year<\/td>\n<td width=\"136\">XXX<\/td>\n<\/tr>\n<tr>\n<td width=\"480\">WDV at the end of the year<\/td>\n<td width=\"136\">XXX<\/td>\n<\/tr>\n<tr>\n<td width=\"480\">Less: Depreciation at block rate (if WDV at the end of the year is positive)<\/td>\n<td width=\"136\">XXX<\/td>\n<\/tr>\n<tr>\n<td width=\"480\">Closing value of the block of the asset at the end of the year<\/td>\n<td width=\"136\">XXX<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>If the amount of WDV comes at a negative amount then no depreciation is allowed and the amount will be considered as capital gain and the closing WDV will be zero.<\/p>\n<p>If such amount is positive and no asset exists in the block then such amount will be treated as short term capital loss and no depreciation is allowed.<\/p>\n<h2>Rates of Depreciation as per the Income Tax ACT<\/h2>\n<table width=\"632\">\n<tbody>\n<tr>\n<td width=\"490\"><strong>Block of assets<\/strong><\/td>\n<td width=\"142\"><em>Rate applicable from A.Y. 2018- 19 Onwards<\/em><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><em>PART A<\/em><\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">TANGIBLE ASSETS<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><strong>I. BUILDING<\/strong><\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>1<\/em>) Buildings which are used mainly for residential purposes, except hotels and boarding houses<\/td>\n<td width=\"142\">5<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>2<\/em>) Buildings other than those used mainly for residential purposes and not covered by sub-items (1) above and (3) below<\/td>\n<td width=\"142\">10<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>3<\/em>) Buildings acquired on or after the 1st day of September 2002 for installing machinery and plant forming part of a water supply project or a water treatment system, and which is put to use for the business of providing infrastructure facilities under clause (<em>i<\/em>) of sub-section (4) of\u00a0section 80-IA<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>4<\/em>) Purely temporary erections, such as wooden structures<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><strong>II. FURNITURE AND FITTINGS<\/strong><\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">Furniture and fittings, including electrical fittings<\/td>\n<td width=\"142\">10<\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><strong>III. MACHINERY AND PLANT<\/strong><\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>1<\/em>)\u00a0 Machinery and plant other than those covered by sub-items (2), (3), and (8) below<\/td>\n<td width=\"142\">15<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>2<\/em>)\u00a0 (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);<\/td>\n<td width=\"142\">15<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(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 put to use before the 1st day of April 2020.<\/td>\n<td width=\"142\">30<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>3<\/em>) (<em>i<\/em>) Aeroplanes \u2013 Aeroengines<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>ii<\/em>)\u00a0 (a) Motor buses, motor lorries, and motor taxis are used in the business of running them on hire other than those covered under entry (b).<\/td>\n<td width=\"142\">30<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(b) Motor buses, motor lorries, and motor taxis used in the 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 are put to use before the 1st day of April 2020.<\/td>\n<td width=\"142\">45<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>iii<\/em>) Commercial vehicle which is acquired by the assessee on or after the 1st day of October 1998, but before the 1st day of April 1999 and is put to use for any period before the 1st day of April 1999 for business or profession by the third proviso to clause (<em>ii<\/em>) of sub-section (1) of\u00a0section 32\u00a0[<em>See<\/em>\u00a0Note 6 below the Table]<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>iv<\/em>)\u00a0\u00a0New commercial vehicle which is acquired on or after the 1st day of October 1998, but before the 1st day of April 1999 in replacement of condemned vehicle of over 15 years of age and is put to use for any period before the 1st day of April 1999 for business or profession by the third proviso to clause (<em>ii<\/em>) of sub-section (1) of\u00a0section 32\u00a0[<em>See<\/em>\u00a0Note 6 below the Table]<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>v<\/em>)\u00a0\u00a0New commercial vehicle which is acquired on or after the 1st day of April 1999 but before the 1st day of April 2000 in replacement of condemned vehicle of over 15 years of age and is put to use before the 1st day of April 2000 for business or profession by the second proviso to clause (<em>ii<\/em>) of sub-section (1) of\u00a0<strong>section 32<\/strong>\u00a0[<em>See<\/em>\u00a0Note 6 below the Table]<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>vi<\/em>)\u00a0\u00a0New commercial vehicle which is acquired on or after the 1st day of April 2001 but before the 1st day of April 2002 and is put to use before the 1st day of April 2002 for business or profession [<em>See<\/em>\u00a0Note 6 below the Table]<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>via<\/em>) New commercial vehicle which is acquired on or after the 1st day of January 2009 but before the 1st day of October 2009 and is put to use before the 1st day of October 2009 for business or profession [<em>See<\/em>\u00a0paragraph 6 of the Notes below this Table]<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>vii<\/em>)\u00a0 Moulds used in rubber and plastic goods factories<\/td>\n<td width=\"142\">30<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>viii<\/em>)\u00a0\u00a0Air pollution control equipment, being\u2014<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>) Electrostatic precipitation systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>) Felt-filter systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>) Dust collector systems<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>) Scrubber-counter current\/venturi\/packed bed\/cyclonic scrubbers<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>e<\/em>) Ash handling system and evacuation system<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>ix<\/em>) Water pollution control equipment, being\u2014<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>) Mechanical screen systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>) Aerated detritus chambers (including air compressor)<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>) Mechanically skimmed oil and grease removal systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>) Chemical feed systems and flash mixing equipment<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>e<\/em>) Mechanical flocculation and mechanical reactors<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>f<\/em>) Diffused air\/mechanically aerated activated sludge systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>g<\/em>) Aerated lagoon systems<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>h<\/em>) Biofilters<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>i<\/em>) Methane-recovery anaerobic digester systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>j<\/em>) Air flotation systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>k<\/em>) Air\/steam stripping systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>l<\/em>) Urea Hydrolysis Systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>m<\/em>) Marine outfall systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>n<\/em>) Centrifuge for dewatering sludge<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>o<\/em>) Rotating biological contractor or bio-disc<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>p<\/em>) Ion exchange resin column<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>q<\/em>) Activated carbon column<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">\u00a0(<em>x<\/em>)\u00a0(<em>a<\/em>) Solid waste control equipment \u2013 caustic\/ lime\/ chrome \/mineral \/cryolite recovery systems<\/td>\n<td rowspan=\"2\" width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>) Solid waste recycling and resource recovery systems<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>xi<\/em>) Machinery and plant, used in semi-conductor industry covering all integrated circuits (ICs) (excluding hybrid integrated circuits) ranging from small-scale integration (SSI) to large-scale integration\/very large-scale integration (LSI\/VLSI) as also discrete semiconductor devices such as diodes, transistors, thyristors, triacs, etc., other than those covered by entries (<em>viii<\/em>), (<em>ix<\/em>) and (<em>x<\/em>) of this sub-item and sub-item (8) below<\/td>\n<td width=\"142\">30<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>xia<\/em>) Life-saving medical equipment, being\u2014<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>)\u00a0\u00a0D.C. Defibrillators for internal use and pacemakers<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>) Haemodialysis<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>) Heart-lung machine<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>) Cobalt Therapy Unit<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>e<\/em>) Colour Doppler<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>f<\/em>) SPECT Gamma Camera<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>g<\/em>) Vascular Angiography System, including Digital Subtraction Angiography<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>h<\/em>) Ventilator used with anaesthesia apparatus<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>i<\/em>) Magnetic Resonance Imaging System<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>j<\/em>) Surgical Laser [See Note 5B]<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>k<\/em>) Ventilators other than those used with anaesthesia<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>l<\/em>) Gamma knife<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>m<\/em>) Bone Marrow Transplant Equipment, including Silastic long-standing intravenous catheters for chemotherapy<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>n<\/em>) Fibreoptic endoscopes including Paediatric resectoscope\/audit resectoscope, Peritoneoscopes, Arthroscope, Microlaryngoscope, Fibreoptic Flexible Nasal Pharyngo Bronchoscope, Fibreoptic Flexible Laryngo Bronchoscope, Video Laryngo Bronchoscope and Video OesophagoGastroscope, Stroboscope, Fibreoptic Flexible OesophagoGastroscope<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>o<\/em>) Laparoscope (single incision)<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>4<\/em>) Containers made of glass or plastic used as refills<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>5<\/em>) Computers, including computer software<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>6<\/em>) Machinery and plant used in the weaving, processing, and garment sector of the textile industry, which is purchased under TUFS on or after the 1st day of April 2001 but before the 1st day of April 2004, and is put to use before the 1st day of April 2004<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>7<\/em>) Machinery and plant, acquired and installed on or after the 1st day of September 2002 in a water supply project or a water treatment system, and which is put to use for the business of providing infrastructure facilities under clause (<em>i<\/em>) of sub-section (4) of\u00a0section 80-IA<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>8<\/em>) (<em>i<\/em>) Wooden parts used in artificial silk manufacturing machinery<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>ii<\/em>) Cinematograph films \u2013 bulbs of studio lights<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>iii<\/em>) Match factories \u2013 Wooden match frames<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>iv<\/em>) Mines and quarries :<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>) Tubs, winding ropes, haulage ropes, and sand-stowing pipes<\/td>\n<td rowspan=\"2\" width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>) Safety lamps<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>v<\/em>) Saltworks \u2013 Salt pans, reservoirs, and condensers, etc., made of earthy, sandy, or clayey material or any other similar material<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>vi<\/em>) Flour mills \u2013 Rollers<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>vii<\/em>) Iron and steel industry \u2013 Rolling mill rolls<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>viii<\/em>) Sugar works \u2013 Rollers<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>ix<\/em>) Energy-saving devices, being\u2014<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><em>A.<\/em>\u00a0Specialised boilers and furnaces:<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>)\u00a0\u00a0Ignifluid\/fluidized bed boilers<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>)\u00a0\u00a0Flameless furnaces and continuous pusher-type furnaces<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>)\u00a0\u00a0Fluidized bed-type heat treatment furnaces<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>) High-efficiency boilers (thermal efficiency higher than 75 per cent in the case of coal-fired and 80 per cent in the case of oil\/gas-fired boilers)<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><em>B.<\/em>\u00a0Instrumentation and monitoring system for monitoring energy flows:<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>)\u00a0\u00a0Automatic electrical load monitoring systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>)\u00a0\u00a0Digital heat loss meters<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>Microprocessor-based<\/em>\u00a0control systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>)\u00a0\u00a0Infra-red thermography<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>e<\/em>)\u00a0\u00a0Meters for measuring heat losses, furnace oil flow, steam flow, electric energy, and power factor meters<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>f<\/em>)\u00a0\u00a0Maximum demand indicator and clamp-on power meters<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>g<\/em>)\u00a0\u00a0Exhaust gases analyzer<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>h<\/em>)\u00a0\u00a0Fuel oil pump test bench<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><em>C.<\/em>\u00a0Waste heat recovery equipment:<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>)\u00a0\u00a0Economisers and feed water heaters<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>)\u00a0\u00a0Recuperators and air pre-heaters<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>)\u00a0\u00a0Heat pumps<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>)\u00a0\u00a0Thermal energy wheel for high and low-temperature waste heat recovery<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><em>D.<\/em>\u00a0Co-generation systems:<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>)\u00a0\u00a0Back pressure, pass out, controlled extraction, extraction-<em>cum<\/em>-condensing turbines for cogeneration, along with pressure boilers<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>)\u00a0\u00a0Vapour absorption refrigeration systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>)\u00a0\u00a0OrganicRankine Cycle Power Systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>)\u00a0\u00a0Low inlet pressure, small steam turbines<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><em>E.<\/em>\u00a0Electrical equipment:<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>)\u00a0\u00a0Shunt capacitors and synchronous condenser systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>)\u00a0\u00a0Automatic power cut-off devices (relays) mounted on individual motors<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>)\u00a0\u00a0Automatic voltage controller<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>)\u00a0\u00a0Power factor controller for AC motors<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>e<\/em>) Solid-state devices for controlling motor speeds<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>f<\/em>)\u00a0\u00a0Thermally energy-efficient centres (which require 800 kilocalories or fewer kilocalories of heat to evaporate one kilogram of water)<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>g<\/em>)\u00a0\u00a0Series compensation equipment<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>h<\/em>)\u00a0\u00a0Flexible AC Transmission (FACT) devices \u2013 Thyristor-controlled series compensation equipment<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>i<\/em>)\u00a0\u00a0Time of Day (ToD) energy meters<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>j<\/em>)\u00a0\u00a0Equipment to establish transmission highways for the National Power Grid to facilitate the transfer of surplus power from one region to the deficient region<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>k<\/em>)\u00a0\u00a0Remote terminal units\/intelligent electronic devices, computer hardware\/software, routers\/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<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>l<\/em>)\u00a0\u00a0Special energy meters for Availability Based Tariff (ABT)<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><em>F.<\/em>\u00a0Burners:<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>)\u00a0\u00a00 to 10 per cent excess air burners<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>)\u00a0\u00a0Emulsion burners<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>) Burners using air with high pre-heating temperature (above 300\u00b0C)<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><em>G.<\/em>\u00a0Other equipment:<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>) Wet air oxidation equipment for the recovery of chemicals and heat<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>) Mechanical vapour compressors<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>) Thin film evaporators<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>) Automatic microprocessor-based load demand controllers<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>e<\/em>) Coal-based producer gas plants<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>f<\/em>) Fluid drives and fluid couplings<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>g<\/em>) Turbo charges\/super-charges<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>h<\/em>)\u00a0\u00a0Sealed radiation sources for radiation processing plants<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>x<\/em>) Gas cylinders, including valves and regulators<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>xi<\/em>\u00a0Glass manufacturing concerns \u2013 Direct fire glass melting furnaces<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>xii<\/em>) Mineral oil concerns:<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>)\u00a0\u00a0Plant used in field operations (above ground) distribution \u2013 Returnable packages<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>) 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<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>) Oil wells not covered in clauses (a) and (b) (with effect from the assessment year 2016-17)<\/td>\n<td width=\"142\">15<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>xiii<\/em>) Renewal energy devices being\u2014<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>) Flat plate solar collectors<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>) Concentrating and pipe-type solar collectors<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>c<\/em>) Solar cookers<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>d<\/em>) Solar water heaters and systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>e<\/em>) Air\/gas\/fluid heating systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>f<\/em>) Solar crop driers and systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>g<\/em>) Solar refrigeration, cold storage, and air-conditioning systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>h<\/em>) Solar steels and desalination systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>i<\/em>) Solar power-generating systems<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>j<\/em>) Solar pumps based on solar-thermal and solar-photovoltaic conversion<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>k<\/em>) Solar-photovoltaic modules and panels for water pumping and other applications<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>l<\/em>) Windmills and any specially designed devices that run on windmills installed on or before March 31, 2012<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>m<\/em>) Any special devices, including electric generators and pumps running on wind energy, installed on or before March 31, 2012<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>n<\/em>) Biogas plant and biogas engines<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>o<\/em>) Electrically operated vehicles, including battery-powered or fuel-cell-powered vehicles<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>p<\/em>) Agricultural and municipal waste conversion devices producing energy<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>q<\/em>) Equipment for utilising ocean waste and thermal energy<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>r<\/em>) Machinery and plant used in the manufacture of any of the above sub-items<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(9) (<em>i<\/em>) Books owned by assesses carrying on a profession\u2014<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>a<\/em>) Books, being annual publications<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>b<\/em>) Books other than those covered by entry (<em>a<\/em>) above<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(<em>ii<\/em>) Books owned by assesses carrying on business in running lending libraries<\/td>\n<td width=\"142\">40<\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><strong>IV. SHIPS<\/strong><\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(1) Ocean-going ships, including dredgers, tugs, barges, survey launches, and other similar ships used mainly for dredging purposes, and fishing vessels with wooden hulls<\/td>\n<td width=\"142\">20<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(2) Vessels ordinarily operating on inland waters, not covered by sub-item (3) below<\/td>\n<td width=\"142\">20<\/td>\n<\/tr>\n<tr>\n<td width=\"490\">(3) Vessels ordinarily operating on inland water are speed boats [<em>See<\/em>\u00a0Note 10 below the Table]<\/td>\n<td width=\"142\">20<\/td>\n<\/tr>\n<tr>\n<td width=\"490\"><em>PART B<\/em><\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">INTANGIBLE ASSETS<\/td>\n<td width=\"142\"><\/td>\n<\/tr>\n<tr>\n<td width=\"490\">Know-how, patents, copyrights, trademarks, licences, franchises, or any other business or commercial rights of a similar nature, not being goodwill of businesses or professions<\/td>\n<td width=\"142\">25<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2>Additional Depreciation aper the\u00a0 \u00a0Income Tax Act<\/h2>\n<p>Apart from normally allowable depreciation, business organisations can claim additional depreciation under clause (iii) of Section 32(1) of the Income Tax Act 1961 concerning new machinery or plants other than ships and crafts.<br \/>\nThe assessee should be engaged in the following business to avail such depreciation; they are as follows<\/p>\n<ul>\n<li>Business or organization, or<\/li>\n<li>Production of any article or thing or<\/li>\n<li>In the business of generation or the generation and distribution of power<\/li>\n<\/ul>\n<p>The depreciation is eligible for a further sum of 20% of the actual cost of such machinery or plant.<\/p>\n<h2>Non-eligibility for claiming additional depreciation<\/h2>\n<p>No deduction under additional depreciation shall be allowed in respect of<\/p>\n<ul>\n<li>any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person (second-hand or used plant and machinery )or<\/li>\n<li>any machinery or plant installed in any office premises or any residential accommodation, including accommodation like a guest house, or<\/li>\n<li>any office appliances or road transport vehicles, or<\/li>\n<li>any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head \u201cProfits and Gains from Business or Profession\u201d of any previous year.<\/li>\n<li>100% Depreciable assets like Pollution Control Equipment<\/li>\n<\/ul>\n<h2>Carry Forward Provisions<\/h2>\n<p>Additional depreciation can also be carried forward in subsequent years. (i.e., the asset is put to use in less than 180 days, 50% of additional depreciation will be claimed in the previous year, and the remaining 50% of additional depreciation can be claimed in the subsequent year)<\/p>\n<h2>No additional depreciation if opting for a lower rate of 22%<\/h2>\n<p>Domestic companies which are engaged in the business of manufacture or production of any article or thing or generation, transmission of power and <span style=\"color: #333333;\">tax audit limit for business and profession<\/span> of 22%, such companies will not be allowed a deduction for additional depreciation as per Section 32(1)(iia) [Section 115BAA(2)(i)].<\/p>\n<p>Further, additional depreciation will also not be allowed to be adjusted while computing taxable income as per section 115BAA(1). However, ibeforeto AY 2020-21 any additional depreciation as per Section 32(1)(iia) has not been given full effect to, then it will be allowed to be adjusted in WDV of a relevant block of assets as on 1 April 2019, if opted for section 115BAA for AY 2020-21 on or before the due date of filing ITR as specified u\/s 139(1) [Proviso to Section 115BAA(3)].<\/p>\n<p>Similar to section 115BAA, given section 115BAB(2)(c), if a lower rate of 15% is claimed, then the deduction of additional depreciation will not be allowed.<\/p>\n<h2>Impact of section 43A adjustment<\/h2>\n<p>If the actual cost of any asset, which is eligible for additional depreciation, is increased or decreased due to adjustment by application of section 43A, then it seems that the additional depreciation should accordingly be adjusted in the tax computation of said year.<\/p>\n<h2>Additional depreciation concerning setting up units in backward areas:<\/h2>\n<p>As per the proviso to Section 32 (1)(iia)<\/p>\n<p>Additional depreciation shall be allowed on new plant and machinery (other than ships, aircraft, vehicle, office appliances, second hand plant or machinery, etc.) shall be allowed subject to certain conditions.<\/p>\n<p>Such additional depreciation to be allowed to all taxpayers which set up an undertaking or enterprise for production or manufacture of any article or thing in any notified backward area in the state of Andhra Pradesh, Bihar, Telangana or West Bengal.<\/p>\n<p><strong>Note:<\/strong><\/p>\n<ol>\n<li>The manufacturing unit should be set up on or after April 1, 2015.<\/li>\n<li>New plants and machinery should be acquired and installed on or after April 1, 2015, but before April 1, 2020.<\/li>\n<\/ol>\n<p>Thus, Additional depreciation is to be allowed at 35 % of the actual cost of the new plant and machinery.<\/p>\n<p>However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of the additional depreciation shall be allowed in the year of acquisition and the balance 50% in the next year.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Depreciation as per the slab rates mentioned in the Income Tax Act is allowable expenditure against the profits or gains from the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":1384,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[11,16],"tags":[],"class_list":{"0":"post-4692","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-income-tax-return","8":"category-taxation"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.1 (Yoast SEO v27.5) - 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