Rates of Depreciation as Per Income Tax Act, 1961
Tax Kundali Team
Rates of Depreciation as per Income Tax Act, 1961 for the assessment year 2020-2021 on Building, Plant & Machinery, Furniture & Fittings, Ships & on Intangibles Assets.
Classification of Depreciable assets
a. Tangible Assets being buildings, machinery, plant or furniture;
b. Intangible Assets being know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature; in respect of which the same percentage of depreciation is prescribed.
Conditions to claim depreciation:-
1. Assets should be used for business/profession purposes of the assessee
2. The assessee should be the owner of such assets. The assets may be owned wholly or partially. If the assessee is not the owner of the assets, he is not entitled to depreciation.
Rates of depreciation
| Block of assets Rate(% of WDV) | ||||
| 1. | BUILDING | |||
| (i) | Residential | 5 | ||
| (ii) | General | 10 | ||
| (iii) | Temporary Structure | 40 | ||
| 2. | FURNITURE & FITTING | 10 | ||
| 3. | PLANT & MACHINERY | |||
| (i) | Motor Vehicles | |||
| (a) | Used in a business of running them on hire | 30 | ||
| If above(a) Acquired & put to use between 23-08-2019 to 31-03-2020 | 45 | |||
| (b) | Other motor vehicles | 15 | ||
| If above(b) Acquired & put to use between 23-08-2019 to 31-03-2020 | 30 | |||
| (ii) | Ships | 20 | ||
| (iii) | Aircraft | 40 | ||
| (iv) | Computer / Laptop(Including Computer Software) | 40 | ||
| (v) | Books | |||
| (a) | Owned by assesses carrying on a profession | 40 | ||
| (b) | Libraries business | 40 | ||
| (vi) | Windmills & its equipments | |||
| (a) | Installed before 01-04-2014 | 15 | ||
| (b) | Installed on of after 01-04-2014 | 40 | ||
| (vii) | Pollution control equipments | 40 | ||
| (viii) | Other plant & machinery | 15 | ||
| (ix) | Oil wells | 15 | ||
| (x) | Aeroplanes | 40 | ||
| (xi) | Moulds used in rubber and plastic goods factories | 30 | ||
| 4 | INTANGIBLE ASSETS | 25 | ||
Note:-
1. If the asset is put to use for less than 180 days during the previous year, then depreciation claim shall be restricted to 50 percent of the normal depreciation. Full depreciation as per the prescribed rate is allowed if the asset is put to use for 180 days or more during the previous year. This restriction applies for the first year of acquisition and not in subsequent years.
2. Buildings include roads, bridges, culverts, wells, and tube-wells.
3. Intangible assets include know-how, patents, copyrights, trademark, licenses, franchises, or any other business or commercial rights of similar nature.