Depreciation Rates are percentage prescribed on the written down value (WDV) of the block of assets being tangible or intangible assets (such intangible assets being acquired on or after 01.04.1998). You can claim depreciation at such percentage prescribed.
Tangible assets being buildings, machinery, plant or furniture.
Intangible assets, being know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature.
To claim depreciation, the "assets" or "block of assets" should be owned by the assessee, either wholly or partly, and should be used for the purpose of business or profession.
Registered Ownership is not pre-requisite. Building acquired on part payment of price, pending registration, could be treated as acquired by the assessee.
Used for the business or profession does not necessarily mean actually used. Even the asset which is ready for use is eligible for depreciation under section 32.
|Block No.||Description of the Asset||RoD (%)|
|1||Residential Buildings (except Hotels and Boarding Houses)||5|
|4||Furniture and Fittings (including Electrical Fittings)||10|
|5||General Plant and Machinery||15|
|6||Depreciation Rates for Motor Cars (other than those used in the business of running them on hire) acquired or put to use on or after 01.04.1990||15|
|12||Ships including Speed Boat (for individual eligible assets refer the Income-tax Rules||20|
|13||Intangible Assets - Know-how, Patents, Copyrights, Trademarks, Licences, Franchises or any other Business or Commercial Rights of similar nature||100|
"buildings" include roads, bridges, culverts, wells and tube-wells.
The word `building' means structure and does not include the site.
Theatre Building and Hotel Buildings are buildings only and cannot be treated as "Plant".
Operation Theatre in a Hospital can be treated as "Plant" since equipments are installed in the Walls.
A building shall be treated as "Residential Building" if the built-up floor area thereof used for residential purposes is not less than 66 2/3 % of the total built-up floor area.
Where the business or profession of the assessee is carried on in a building not owned by him,
but in respect of which the assessee holds a lease, or
other right of occupancy, and
any capital expenditure (renovation or extension or improvement) is incurred by the assessee for the purposes of business or profession on the aforesaid building,
then the capital expenditure incurred shall be deemed to be a building owned by the assessee. The rate to be applied in such cases is as per Block 1 or 3 above.
Infrastructure Facility (for the purpose of Block No. 2 above) means
Road including a toll road, a bridge or a rail system
Highway project including housing or other activities being an integral part of the highway project
Water Supply Project, Water Treatment System, Irrigation Project, Sanitation and Sewerage System or Solid Waste Management System
Port, Airport, Inland Waterways or Inland Port
Water Treatment System includes system for desalination, demineralization and purification of water.
The word "Plant" includes ships, vehicles, books, scientific apparatus and surgical equipments used for the purpose of business or profession but do not include tea bushes or livestock.
"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", "tractor" and "road-roller".
"Computer software" means any computer program recorded on any disc, tape, perforated media or other information storage device.
"TUFS" means Technology Up-gradation Fund Scheme announced by the Government of India in the form of Resolution of the Ministry of Textiles.
"Machinery" and "Plant" includes pipes needed for delivery from the source of supply of raw water to the plant and from the plant to the storage facility.
"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.
The expression "know-how" means any industrial information or technique likely to assist in the manufacture or processing of goods or in the working of mine, oil-well or other sources of mineral deposits.
"Electrical Fittings" has been defined to include electrical wiring, switches, sockets, other fittings and fans, etc.