Depreciation Rates

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.

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Depreciation Rates Table

Block No. Description of the Asset RoD (%)
1 Residential Buildings (except Hotels and Boarding Houses) 5
2
  • Depreciation Rates for Buildings acquired on or after 01.09.2002 for installing machinery or plant forming part of water supply project or water treatment system and which is put to use for the purpose of business of providing infrastructure facilities under section 80-IA(4)(i).

  • Purely temporary erections such as Wooden Structures

100
3 Other Buildings 10
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
7
  • Motor Buses, Motor Lorries and Motor Taxis used in a business of running them on hire

  • Moulds used in Rubber and Plastic Industry

  • Machinery and Plant used in semi-conductor industry covering all ICs

30
7
  • Depreciation Rates for Aero planes - Aero engines

  • New Commercial Vehicles (acquired from 01.10.1998 to 31.03.1999) and put to use in the same previous year

40
8
  • New Commercial Vehicles (acquired from 01.04.2001 to 31.03.2002) and put to use in the year of acquisition

  • Depreciation Rates for New Commercial Vehicles (acquired from 01.01.2009 to 30.09.2009) and put to use before 01.10.2009

  • Machinery and Plant used in Weaving, Processing and Garment Sector of Textile Industry (purchased under TUFS between 01.04.2001 and 31.03.2004 and put to use before 01.04.2004)

50
9
  • New Commercial Vehicles (acquired from 01.10.1998 to 31.03.2000) acquired in replacement of condemned vehicles of 15 years of age and put to use in the year of acquisition

  • Computers including Computer Software

  • Books (not being Annual Publications)

  • Gas Cylinders including valves and regulators

  • Depreciation Rates for Glass Manufacturing Concerns - Direct Fibre Glass Melting Furnaces

  • Mineral Oil Concerns (for individual eligible assets refer the Income-tax Rules)

60
10
  • Rollers being Flour Mill Rollers, Iron and Steel Industry - Rolling Mill Rolls, Sugar Mill Rollers

  • Energy Saving Devices, being Specialised Boilers and Furnaces, Instrumentation and Monitoring System for Monitoring Energy Flows, Waste Heat Recovery Equipment, Co-generation Systems, Electrical Equipment, Burners and Other Equipments (for individual eligible assets refer the Income-tax Rules)

  • Renewal Energy Devices (for individual eligible assets refer the Income-tax Rules)

80
11
  • Machineries acquired and installed on or after 01.09.2002 of water supply project or water treatment system and which is put to use for the purpose of business of providing infrastructure facilities under section 80-IA(4)(i).

  • Air Pollution Control Equipments, Water Pollution Control Equipments, Solid Waste Control Equiments, Solid Waste Recycling and Resource Recovery Systems (for individual eligible assets refer the Income-tax Rules)

  • Wooden parts used in Artificial Silk Manufacturing Machinery

  • Depreciation Rates for Cinematograph Films - Bulbs of Studio Lights

  • Match Factories - Wooden Match Frames

  • Mines and Quarries - Tubs, Winding Ropes, Haulage Ropes, Sand Stowing Pipes and Safety Lamps.

  • Salt Works - Salt Pans, Reservoirs and Condensers, etc., made of earthy, sandy or clayey material or any other similar material

  • Books - Annual Publications

  • Books - Owned by assessees carrying on business in running Lending Libraries.

100
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

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Notes - Building

  • "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.

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Notes - Infrastructure Facility

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

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Notes:

  • 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.

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Related Topics

Written Down Value »

Additional Depreciation »

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