​Depreciation rates A.Y. 2017-18

 

While computing profits and gains from business or profession, a taxpayer can claim depreciation on all those assets which he has acquired and used for the purpose of his business or profession. Different depreciation rates are prescribed for different nature of assets. This write up lists down all such depreciation rates.

Rates of depreciation (for income-tax)

AS APPLICABLE FROM THE ASSESSMENT YEAR 2003-04 ONWARDS

Block of assets Depreciation allowance as percentage of written down value
AYs 2003-04 to 2005-06 AY 2006-07 onwards
1 2 3
PART A
TANGIBLE ASSETS
I. BUILDING [See Notes 1 to 4 below the Table]
(1) Buildings which are used mainly for residential purposes except hotels and boarding houses 5 5
(2)  Buildings other than those used mainly for residential purposes and not covered by sub-items (1) above and (3) below 10 10
(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 section 80-IA 100 100
(4)  Purely temporary erections such as wooden structures 100 100
II. FURNITURE AND FITTINGS
Furniture and fittings including electrical fittings [See Note 5 below the Table] 15 10
III. MACHINERY AND PLANT
(1)  Machinery and plant other than those covered by sub-items (2), (3) and (8) below : 25c. 15c.
a.(2) 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 20 15
(3)  (i) Aeroplanes – Aeroengines 40 40
b.(ii) Motor buses, motor lorries and motor taxis used in a business of running them on hire 40 30
 (iii) 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 the purposes of business or profession in accordance with the third proviso to clause (ii) of sub-section (1) of section 32 [See Note 6 below the Table] 40 40
(iv)  New 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 the purposes of business or profession in accordance with the third proviso to clause (ii) of sub-section (1) of section 32 [See Note 6 below the Table] 60 60
(v)  New 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 the purposes of business or profession in accordance with the second proviso to clause (ii) of sub-section (1) of section 32 [See Note 6 below the Table] 60 60
(vi)  New 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 the purposes of business or profession [See Note 6 below the Table] 50 50
(via) 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 the purposes of business or profession [See paragraph 6 of the Notes below this Table] 50
d.(vii) Moulds used in rubber and plastic goods factories 40 30
(viii)  Air pollution control equipment, being—
(a)  Electrostatic precipitation systems 100 100
(b)  Felt-filter systems 100 100
(c)  Dust collector systems 100 100
(d)  Scrubber-counter current/venturi/packed bed/cyclonic scrubbers 100 100
(e)  Ash handling system and evacuation system 100 100
(ix)  Water pollution control equipment, being— 100 100
(a)  Mechanical screen systems 100 100
(b)  Aerated detritus chambers (including air compressor) 100 100
(c)  Mechanically skimmed oil and grease removal systems 100 100
(d)  Chemical feed systems and flash mixing equipment 100 100
(e)  Mechanical flocculators and mechanical reactors 100 100
(f)  Diffused air/mechanically aerated activated sludge systems 100 100
(g)  Aerated lagoon systems 100 100
(h)  Biofilters 100 100
(i)  Methane-recovery anaerobic digester systems 100 100
(j)  Air floatation systems 100 100
(k)  Air/steam stripping systems 100 100
(l)  Urea Hydrolysis systems 100 100
(m)  Marine outfall systems 100 100
(n)  Centrifuge for dewatering sludge 100 100
(o)  Rotating biological contractor or bio-disc 100 100
(p)  Ion exchange resin column 100 100
(q)  Activated carbon column 100 100
 (x) (a) Solidwaste control equipments being – caustic/lime/chrome/mineral/cryolite recovery systems 100 100
(b)  Solidwaste recycling and resource recovery systems
(xi)  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 semi-conductor devices such as diodes, transistors, thyristors, triacs, etc., other than those covered by entries (viii), (ix) and (x) of this sub-item and sub-item (8) below 40 30
(xia) Life saving medical equipment, being— 40 40
(a)  D.C. Defibrillators for internal use and pace makers 40 40
(b)  Haemodialysors 40 40
(c)  Heart lung machine 40 40
(d)  Cobalt Therapy Unit 40 40
(e)  Colour Doppler 40 40
(f)  SPECT Gamma Camera 40 40
(g)  Vascular Angiography System including Digital subtraction Angiography 40 40
(h)  Ventilator used with anaesthesia apparatus 40 40
(i)  Magnetic Resonance Imaging System 40 40
(j)  Surgical Laser 40† 40
(k)  Ventilators other than those used with anaesthesia 40 40
(l)  Gamma knife 40 40
(m)  Bone Marrow Transplant Equipment including silastic long standing intravenous catheters for chemotherapy 40 40
(n)  Fibreoptic endoscopes including Paediatric resectoscope/audit resectoscope, Peritoneoscopes, Arthoscope, Microlaryngoscope, Fibreoptic Flexible Nasal Pharyngo Bronchoscope, Fibreoptic Flexible Laryngo Bronchoscope, Video Laryngo Bronchoscope and Video Oesophago Gastroscope, Stroboscope, Fibreoptic Flexible Oesophago Gastroscope 40 40
(o)  Laparoscope (single incision) 40 40
(4)  Containers made of glass or plastic used as re-fills 50 50
(5)  Computers including computer software [See note 7 below the Table] 60 60
(6)  Machinery and plant, used in weaving, processing and garment sector of 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 [See Note 8 below the Table] 50 50
(7)  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 purpose of business of providing infrastructure facility under clause (i) of sub-section (4) of section 80-IA [See Notes 4 and 9 below the Table] 100 100
(8)  (i) Wooden parts used in artificial silk manufacturing machinerye. 100 100
(ii)  Cinematograph films – bulbs of studio lights 100 100
(iii)  Match factories – Wooden match frames 100 100
(iv)  Mines and quarries :
(a)  Tubs, winding ropes, haulage ropes and sand stowing pipes 100 100
(b)  Safety lamps
(v)  Salt works – Salt pans, reservoirs and condensers, etc., made of earthy, sandy or clayey material or any other similar material 100 100
(vi)  Flour mills – Rollers 80 80
(vii)  Iron and steel industry – Rolling mill rolls 80 80
(viii)  Sugar works – Rollers 80 80
(ix)  Energy saving devices, being— 80 80
A. Specialised boilers and furnaces:
(a)  Ignifluid/fluidized bed boilers 80 80
(b)  Flameless furnaces and continuous pusher type furnaces 80 80
(c)  Fluidized bed type heat treatment furnaces 80 80
(d)  High efficiency boilers (thermal efficiency higher than 75 per cent in case of coal fired and 80 per cent in case of oil/gas fired boilers) 80 80
B. Instrumentation and monitoring system for monitoring energy flows: 80 80
(a)  Automatic electrical load monitoring systems 80 80
(b)  Digital heat loss meters 80 80
(c)  Micro-processor based control systems 80 80
(d)  Infra-red thermography 80 80
(e)  Meters for measuring heat losses, furnace oil flow, steam flow, electric energy and power factor meters 80 80
(f)  Maximum demand indicator and clamp on power meters 80 80
(g)  Exhaust gases analyser 80 80
(h)  Fuel oil pump test bench 80 80
C. Waste heat recovery equipment: 80 80
(a)  Economisers and feed water heaters 80 80
(b)  Recuperators and air pre-heaters 80 80
(c)  Heat pumps 80 80
(d)  Thermal energy wheel for high and low temperature waste heat recovery 80 80
D. Co-generation systems: 80 80
(a)  Back pressure pass out, controlled extraction, extraction-cum-condensing turbines for co-generation along with pressure boilers 80 80
(b)  Vapour absorption refrigeration systems 80 80
(c)  Organic rankine cycle power systems 80 80
(d)  Low inlet pressure small steam turbines 80 80
E. Electrical equipment:
(a)  Shunt capacitors and synchronous condenser systems 80 80
(b)  Automatic power cut off devices (relays) mounted on individual motors 80 80
(c)  Automatic voltage controller 80 80
(d)  Power factor controller for AC motors 80 80
(e)  Solid state devices for controlling motor speeds 80 80
(f)  Thermally energy-efficient stenters (which require 800 or less kilocalories of heat to evaporate one kilogram of water) 80 80
(g)  Series compensation equipment 80 80
(h)  Flexible AC Transmission (FACT) devices – Thyristor controlled series compensation equipment 80 80
(i)  Time of Day (ToD) energy meters 80 80
(j)  Equipment to establish transmission highways for National Power Grid to facilitate transfer of surplus power of one region to the deficient region 80 80
(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 80 80
(l)  Special energy meters for Availability Based Tariff (ABT) 80 80
F. Burners:
(a)  0 to 10 per cent excess air burners 80 80
(b)  Emulsion burners 80 80
(c)  Burners using air with high pre-heat temperature (above 300°C) 80 80
G. Other equipment:
(a)  Wet air oxidation equipment for recovery of chemicals and heat 80 80
(b)  Mechanical vapour recompressors 80 80
(c)  Thin film evaporators 80 80
(d)  Automatic micro-processor based load demand controllers 80 80
(e)  Coal based producer gas plants 80 80
(f)  Fluid drives and fluid couplings 80 80
(g)  Turbo charges/super-charges 80 80
(h)  Sealed radiation sources for radiation processing plants 80 80
f.(x) Gas cylinders including valves and regulators 80 60
(xi)  Glass manufacturing concerns – Direct fire glass melting furnaces 80 60
g.(xii) Mineral oil concerns:
(a)  Plant used in field operations (above ground) distribution – Returnable packages 80 60
(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 80 60
(xiii)  Renewal energy devices being—
(a)  Flat plate solar collectors 80 80
(b)  Concentrating and pipe type solar collectors 80 80
(c)  Solar cookers 80 80
(d)  Solar water heaters and systems 80 80
(e)  Air/gas/fluid heating systems 80 80
(f)  Solar crop driers and systems 80 80
(g)  Solar refrigeration, cold storages and air-conditioning systems 80 80
(h)  Solar steels and desalination systems 80 80
(i)  Solar power generating systems 80 80
(j)  Solar pumps based on solar-thermal and solar-photovoltaic conversion 80 80
(k)  Solar-photovoltaic modules and panels for water pumping and other applications 80 80
(l)  Windmills and any specially designed devices which run on wind-mills installed on or before March 31, 2012 80 80
(m)  Any special devices including electric generators and pumps running on wind energy installed on or before March 31, 2012 80 80
(n)  Biogas plant and biogas engines 80 80
(o)  Electrically operated vehicles including battery powered or fuel-cell powered vehicles 80 80
(p)  Agricultural and municipal waste conversion devices producing energy 80 80
(q)  Equipment for utilising ocean waste and thermal energy 80 80
(r)  Machinery and plant used in the manufacture of any of the above sub-items 80 80
(9)  (i) Books owned by assessees carrying on a profession— 80 80
(a)  Books, being annual publications 100 100
(b)  Books, other than those covered by entry (a) above 60 60
(ii)  Books owned by assessees carrying on business in running lending libraries 100 100
IV. SHIPS
(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 25 20
(2)  Vessels ordinarily operating on inland waters, not covered by sub-item (3) below 25 20
(3)  Vessels ordinarily operating on inland waters being speed boats [See Note 10 below the Table] 25 20
PART B
INTANGIBLE ASSETS
Know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature 25 25

Notes:

  1. “Buildings” include roads, bridges, culverts, wells and tubewells.
  2. 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.
  3. In respect of any structure or work by way of renovation or improvement in or in relation to a building referred to inExplanation 1 of clause (ii) of sub-section (1) of section 32, the percentage to be applied will be the percentage specified against sub-item (1) or (2) of item I as may be appropriate to the class of building in or in relation to which the renovation or improvement is effected. 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.
  4. Water treatment system includes system for desalination, demineralisation and purification of water.
  5. “Electrical fittings” include electrical wiring, switches, sockets, other fittings and fans, etc.
  6. “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”. 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).
  7. “Computer software” means any computer programme recorded on any disc, tape, perforated media or other information storage device.
  8. “TUFS” means Technology Upgradation Fund Scheme announced by the Government of India in the form of a Resolution of the Ministry of Textilesvide No. 28/1/99-CTI of 31-3-1999.
  9. 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.
  10. “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.

Depreciation rates for power generating units

(applicable from the assessment year 1998-99

Class of assets Depreciation allowance as percentage of actual cost
(a)  Plant and Machinery in generating stations including plant foundations :—
 (i)  Hydro-electric 3.4
(ii)  Steam electric NHRS & Waste heat recovery Boilers/plants 7.84
(iii)  Diesel electric and Gas plant 8.24
(b)  Cooling towers and circulating water systems 7.84
(c)  Hydraulic works forming part of Hydro-electric system including :—
  (i)  Dams, spillways weirs, canals, reinforced concrete flumes and syphons 1.95
(ii)  Reinforced concrete pipelines and surge tanks steel pipelines, sluice gates, steel surge (tanks), hydraulic control valves and other hydraulic works. 3.4
(d)  Building and civil engineering works of permanent character, not mentioned above
 (i)  Office & showrooms 3.02
(ii)  Containing Thermo-electric generating plant 7.84
(iii)  Containing Hydro-electric generating plant 3.4
(iv)  Temporary erection such as wooden structures 33.4
(v)  Roads other than Kutcha roads 3.02
(vi)  Others 3.02
(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 7.81
(ii)  Others 7.84
(f)  Switchgear including cable connections 7.84
(g)  Lightning arrestor :
 (i)  Station type 7.84
(ii)  Pole type 12.77
(iii)  Synchronous condenser 5.27
(h)  Batteries 33.4
 (i)  Underground cable including joint boxes and disconnectioned boxes 5.27
(ii)  Cable duct system 3.02
  (i)  Overhead lines including supports :
 (i)  Lines on fabricated steel operating at nominal voltages higher than 66 kilo volts 5.27
(ii)  Lines on steel supports operating at nominal voltages higher than 13.2 kilo volts but not exceeding 66 kilo volts 7.84
(iii)  Lines on steel or reinforced concrete supports 7.84
(iv)  Lines on treated wood supports 7.84
(j)  Meters 12.77
(k)  Self-propelled vehicles 33.40
(l)  Air-conditioning plants :
 (i)  Static 12.77
(ii)  Portable 33.40
(m)  (i) Office furniture and fittings 12.77
(ii)  Office equipments 12.77
(iii)  Internal wiring including fittings and apparatus 12.77
(iv)  Street light fittings 12.77
(n)  Apparatus let on hire
 (i)  Other than motors 33.4
(ii)  Motors 12.77
(o)  Communication equipment :
 (i)  Radio and high frequency carrier system 12.77
(ii)  Telephone lines and telephones 12.77
(p)  Any other assets not covered above 7.69

Depreciation under Companies Act, 2013

1SCHEDULE II2

(See section 123)

USEFUL LIVES TO COMPUTE DEPRECIATION

PART ‘A’

1. Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount of an asset is the cost of an asset or other amount substituted for cost, less its residual value. 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.

2. For the purpose of this Schedule, the term depreciation includes amortisation.

3. Without prejudice to the foregoing provisions of paragraph 1,—

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.

(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. Amortisation in such cases may be done as follows:—

(a) Mode of amortisation

Amortisation Amount
Cost of Intangible Assets (A)

Amortisation Amount =

Actual Revenue for the year (B)
Projected Revenue from Intangible Asset (till the end of the concession period) (C)

(b) Meaning of particulars are as follows :—

Cost of Intangible Assets (A) = Cost incurred by the company in accordance with the accounting standards.
Actual Revenue for the year (B) = Actual revenue (Toll Charges) received during the accounting year.
Projected Revenue from Intangible Asset (C) = Total projected revenue from the Intangible Assets as provided to the project lender at the time of financial closure/agreement.

The amortisation amount or rate should ensure that the whole of the cost of the intangible asset is amortised over the concession period.

Revenue shall be reviewed at the end of each financial year and projected revenue shall be adjusted to reflect such changes, if any, in the estimates as will lead to the actual collection at the end of the concession period.

(c) Example:—

Cost of creation of Intangible Assets : Rs. 500 Crores
Total period of Agreement : 20 Years
Time used for creation of Intangible Assets : 2 Years
Intangible Assets to be amortised in : 18 Years

Assuming that the Total revenue to be generated out of Intangible Assets over the period would be Rs. 600 Crores, in the following manner:—

Year No. Revenue (In Rs. Crores) Remarks
Year 1 5 Actual
Year 2 7.5 Estimate*
Year 3 10 Estimate*
Year 4 12.5 Estimate*
Year 5 17.5 Estimate*
Year 6 20 Estimate*
Year 7 23 Estimate*
Year 8 27 Estimate*
Year 9 31 Estimate*
Year 10 34 Estimate*
Year 11 38 Estimate*
Year 12 41 Estimate*
Year 13 46 Estimate*
Year 14 50 Estimate*
Year 15 53 Estimate*
Year 16 57 Estimate*
Year 17 60 Estimate*
Year 18 67.5 Estimate*
Total 600

‘*’ will be actual at the end of financial year.

Based on this the charge for first year would be Rs. 4.16 Crore (approximately) (i.e. Rs. 5/Rs. 600 × Rs. 500 Crores) which would be charged to profit and loss and 0.83% (i.e. Rs. 4.16 Crore/Rs. 500 Crore × 100) is the amortisation rate for the first year.

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.]

PART ‘B’

4. The useful life or residual value of any specific asset, as notified for accounting purposes by a Regulatory Authority constituted under an Act of Parliament or by the Central Government shall be applied in calculating the depreciation to be provided for such asset irrespective of the requirements of this Schedule.

PART ‘C’

5. Subject to Parts A and B above, the following are the useful lives of various tangible assets:

Nature of assets Useful Life
I. Buildings [NESD]
(a)  Buildings (other than factory buildings) RCC Frame Structure 60 Years
(b)  Buildings (other than factory buildings) other than RCC Frame Structure 30 Years
(c)  Factory buildings -do-
(d)  Fences, wells, tube wells 5 Years
(e)  Others (including temporary structure, etc.) 3 Years
II. Bridges, culverts, bunders, etc. [NESD] 30 Years
III. Roads [NESD]
(a)  Carpeted roads
  (i)  Carpeted Roads—RCC 10 Years
(ii)  Carpeted Roads—other than RCC 5 Years
(b)  Non-carpeted roads 3 Years
IV. Plant and Machinery
  (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 15 Years
4[(b) Continuous process plant for which no special rate has been prescribed under (ii) below [NESD] 25 Years]
(ii)  Special Plant and Machinery
(a)  Plant and Machinery related to production and exhibition of Motion Picture Films
 1.    Cinematograph films—Machinery used in the production and exhibition of cinematograph films, recording and reproducing equipments, developing machines, printing machines, editing machines, synchronizers and studio lights except bulbs 13 Years
 2.    Projecting equipment for exhibition of films -do-
(b)  Plant and Machinery used in glass manufacturing
1. Plant and Machinery except direct fire glass melting furnaces —
Recuperative and regenerative glass melting furnaces 13 Years
2. Plant and Machinery except direct fire glass melting furnaces — Moulds [NESD] 8 Years
3. Float Glass Melting Furnaces [NESD] 10 Years
(c)  Plant and Machinery used in mines and quarries—Portable under ground machinery and earth moving machinery used in open cast mining [NESD] 8 Years
(d)  Plant and Machinery used in Telecommunications [NESD]
1. Towers 18 Years
2. Telecom transreceivers, switching centres, transmission and other network equipment 13 Years
3. Telecom—Ducts, Cables and optical fibre 18 Years
4. Satellites -do-
(e)  Plant and Machinery used in exploration, production and refining oil and gas [NESD]
1. Refineries 25 Years
2. Oil and gas assets (including wells), processing plant and facilities -do-
3. Petrochemical Plant -do-
4. Storage tanks and related equipment -do-
5. Pipelines 30 Years
6. Drilling Rig -do-
7. Field operations (above ground) Portable boilers, drilling tools, well-head tanks, etc. 8 Years
8. Loggers -do-
(f)  Plant and Machinery used in generation, transmission and distribution of power [NESD]
1. Thermal/Gas/Combined Cycle Power Generation Plant 40 Years
2. Hydro Power Generation Plant -do-
3. Nuclear Power Generation Plant -do-
4. Transmission lines, cables and other network assets -do-
5. Wind Power Generation Plant 22 Years
6. Electric Distribution Plant 35 Years
7. Gas Storage and Distribution Plant 30 Years
8. Water Distribution Plant including pipelines -do-
(g)  Plant and Machinery used in manufacture of steel
1. Sinter Plant 20 Years
2. Blast Furnace -do-
3. Coke ovens -do-
4. Rolling mill in steel plant -do-
5. Basic oxygen Furnace Converter 25 Years
(h)  Plant and Machinery used in manufacture of non-ferrous metals
1. Metal pot line [NESD] 40 Years
2. Bauxite crushing and grinding section [NESD] -do-
3. Digester section [NESD] -do-
4. Turbine [NESD] -do-
5. Equipments for Calcination [NESD] -do-
6. Copper Smelter [NESD] -do-
7. Roll Grinder 40 Years
8. Soaking Pit 30 Years
9. Annealing Furnace -do-
10. Rolling Mills -do-
11. Equipments for Scalping, Slitting, etc. [NESD] -do-
12. Surface Miner, Ripper Dozer, etc., used in mines 25 Years
13. Copper refining plant [NESD] -do-
  (i)  Plant and Machinery used in medical and surgical operations [NESD]
1. Electrical Machinery, X-ray and electrotherapeutic apparatus and accessories thereto, medical, diagnostic equipments, namely, Cat- Scan, Ultrasound Machines, ECG Monitors, etc. 13 Years
2. Other Equipments. 15 Years
(j)  Plant and Machinery used in manufacture of pharmaceuticals and chemicals [NESD]
1. Reactors 20 Years
2. Distillation Columns -do-
3. Drying equipments/Centrifuges and Decanters -do-
4. Vessel/storage tanks -do-
(k)  Plant and Machinery used in civil construction
1. Concreting, Crushing, Piling Equipments and Road Making Equipments 12 Years
2. Heavy Lift Equipments—
Cranes with capacity of more than 100 tons 20 Years
Cranes with capacity of less than 100 tons 15 Years
3. Transmission line, Tunneling Equipments [NESD] 10 Years
4. Earth-moving equipments 9 Years
5. Others including Material Handling /Pipeline/Welding Equipments [NESD] 12 Years
(l)  Plant and Machinery used in salt works [NESD] 15 Years
V. Furniture and fittings [NESD]
  (i)  General furniture and fittings 10 Years
(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. 8 Years
VI. Motor Vehicles [NESD]
1. Motor cycles, scooters and other mopeds 10 Years
2.  Motor buses, motor lorries, motor cars and motor taxies used in a business of running them on hire 6 Years
3. Motor buses, motor lorries and motor cars other than those used in a business of running them on hire 8 Years
4. Motor tractors, harvesting combines and heavy vehicles -do-
5. Electrically operated vehicles including battery powered or fuel cell powered vehicles 8 Years
VII. Ships [NESD]
1. Ocean-going ships
  (i)  Bulk Carriers and liner vessels 25 Years
(ii)  Crude tankers, product carriers and easy chemical carriers with or without conventional tank coatings 20 Years
(iii)  Chemicals and Acid Carriers :
(a)  With Stainless steel tanks 25 Years
(b)  With other tanks 20 Years
(iv)  Liquified gas carriers 30 Years
(v)  Conventional large passenger vessels which are used for cruise purpose also -do-
(vi)  Coastal service ships of all categories -do-
(vii)  Offshore supply and support vessels 20 Years
(viii)  Catamarans and other high speed passenger for ships or boats -do-
(ix)  Drill ships 25 Years
(x)  Hovercrafts 15 Years
(xi)  Fishing vessels with wooden hull 10 Years
(xii)  Dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes 14 Years
2. Vessels ordinarily operating on inland waters—
  (i)  Speed boats 13 Years
(ii)  Other vessels 28 Years
VIII. Aircrafts or Helicopters [NESD] 20 Years
IX. Railways sidings, locomotives, rolling stocks, tramways and railways used by concerns, excluding railway concerns [NESD] 15 Years
X. Ropeway structures [NESD] 15 Years
XI. Office equipment [NESD] 5 Years
XII. Computers and data processing units [NESD]
  (i)  Servers and networks 6 Years
(ii)  End user devices, such as, desktops, laptops, etc. 3 Years
XIII. Laboratory equipment [NESD]
  (i)  General laboratory equipment 10 Years
(ii)  Laboratory equipments used in educational institutions 5 Years
XIV. Electrical Installations and Equipment [NESD] 10 years
XV. Hydraulic works, pipelines and sluices [NESD] 15 Years

Notes.—

1. “Factory buildings” does not include offices, godowns, staff quarters.

2. 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.

3. The following information shall also be disclosed in the accounts, namely:—

(i)  depreciation methods used; and

(ii)  the useful lives of the assets for computing depreciation, if they are different from the life specified in the Schedule.

4. Useful life specified in Part C of the Schedule is for whole of the asset. 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.

5. [***]

6. The useful lives of assets working on shift basis have been specified in the Schedule based on their single shift working. 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.

7.  From the date this Schedule comes into effect, the carrying amount of the asset as on that date—

(a)  shall be depreciated over the remaining useful life of the asset as per this Schedule;

(b)  after retaining the residual value, shall be recognised in the opening balance of retained earnings where the remaining useful life of an asset is nil.

8. “Continuous process plant” means a plant which is required and designed to operate for twenty-four hours a day.

a. Jeeps are classifiable as motor cars — Crompton Engg. Co. (Madras) Ltd. v. CIT [1992] 193 ITR 483 (Mad.)/CAIT v. Good Hope Enterprises [1992] 197 ITR 236 (Ker.).

b. Trucks primarily used for assessee’s own business and occasionally let out on hire will not fall under this entry unless assessee carries on a business of running them on hire—CIT v. Manjeet Stone Co. [1991] 190 ITR 183 (Raj.); Vehicles plying between fixed points for carriage of passengers fall under this entry—ITO v. Sarojini Transports (P.) Ltd. [1986] 17 ITD 1014 (Mad.); Mobile crane mounted on a lorry falls under this entry—Gujco Carriers v. CIT [2002] 122 Taxman 206 (Guj.); Rigs and Compressors mounted on a lorry do not fall under this item—CIT v.Popular Borewell Service [1992] 194 ITR 12 (Mad.); Motor vans are akin to motor lorries or motor buses—Circular No. 609, dated 29-7-1991/CIT v. Kodak Ltd. [1990] 181 ITR 275 (Bom.); Ambulance van falls under this entry—CIT v. Dr. K.R. Jayachandran [1995] 212 ITR 637 (Ker.); Air-conditioned vehicles fall under this entry—CIT v. Urmila Goel [1986] 52 CTR (Delhi) 276.

c. 40 per cent if conditions of rule 5(2) are satisfied.

d. Company manufacturing insulated wires and cables is not covered under this entry—CIT v. Falcon Wires (P.) Ltd. [1980] 123 ITR 427 (Mad.).

e. Machinery used for dyeing, bleaching and printing of cloth manufactured by some other person will not fall under this item—CIT v. Jaypee Dyeing House [1999] 239 ITR 418 (Bom.).

† Applicable from the assessment year 2004-05.

f. Mere fact that assessee sold some cylinders during the previous year will not convert the cylinders into stock-in-trade. The cylinders must be capable of containing gas, and there is no requirement that the cylinders must be filled with gas—Chawla Architects & Consultants (P.) Ltd. v. Asstt. CIT [1995] 54 ITD 330 (Bom.).

g. Petroleum company distributing gas for cooking purpose is a ‘mineral oil concern’—CIT v. Burmah Shell Oil Storage & Distribution Co. of India Ltd. [1978] 115 ITR 891 (Cal.); Vegetable oil is not a ‘mineral oil’—CIT v. Distillers Trading Corporation Ltd. [1982] 137 ITR 894 (Delhi).

1. Corresponds to Schedule XIV of the 1956 Act.

2. Enforced with effect from 1-4-2014.

3. Substituted for clauses (i) to (iii)vide Notification No. GSR 237(E) [F. No. 17/60/2012-CL-V], dated 31-3-2014, w.e.f. 1-4-2014. 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.

(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.”

4. Substitutedvide Notification No. GSR 237(E) [F. No. 17/60/2012-CL-V], dated 31-3-2014, w.e.f. 1-4-2014. Prior to its substitution, clause (b) read as under :

(b) Continuous process plant for which no special rate has been prescribed under (ii) below [NESD] 8 Years”

5. Omittedvide Notification No. GSR 237(E) [F. No. 17/60/2012-CL-V], dated 31-3-2014, w.e.f. 1-4-2014. Prior to its omission, Paragraph 5 read as under :

“5. Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value. Ordinarily, the residual value of an asset is often insignificant but it should generally be not more than 5% of the original cost of the asset.”

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