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 to AY 2017-18 |
AY
2018-19 onwards |
1 |
|
|
2 |
3 |
4 |
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 |
5 |
(2) Buildings
other than those used mainly for residential purposes and not covered by
sub-items (1) above and (3) below |
|
|
10 |
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 |
40 |
(4) Purely
temporary erections such as wooden structures |
|
|
100 |
100 |
40 |
II. FURNITURE AND FITTINGS |
|
|
|
|
|
Furniture and fittings
including electrical fittings [See Note 5 below the Table] |
|
|
15 |
10 |
10 |
III.
MACHINERY AND PLANT |
|
|
|
|
|
(1)
Machinery and plant other than those covered by sub-items (2), (3) and (8)
below : [See Note 5A below the Table] |
|
|
25 |
15 |
15 |
(2) (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); |
|
|
20 |
15 |
15 |
(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 is put to use before the 1st day of April, 2020. |
|
|
- |
- |
30 |
(3) (i)
Aeroplanes - Aeroengines |
|
|
40 |
40 |
40 |
(ii) (a) Motor
buses, motor lorries and motor taxis used in a business of running them on
hire other than those covered under entry (b). |
|
|
40 |
30 |
30 |
(b) Motor buses,
motor lorries and motor taxis 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 is put to use before the 1st day of April, 2020. |
|
|
- |
- |
45 |
(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 |
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 |
40 |
(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 |
40 |
(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 |
40 |
(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 |
40 |
(vii)
Moulds used in rubber and plastic goods factories |
|
|
40 |
30 |
30 |
(viii) Air
pollution control equipment, being— |
|
|
|
|
|
(a) Electrostatic
precipitation systems |
|
|
|
|
|
(b) Felt-filter
systems |
|
|
|
|
|
(c) Dust
collector systems |
|
|
100 |
100 |
40 |
(d) Scrubber-counter
current/venturi/packed bed/cyclonic scrubbers |
|
|
|
|
|
(e) Ash
handling system and evacuation system |
|
|
|
|
|
(ix) Water
pollution control equipment, being— |
|
|
|
|
|
(a) Mechanical
screen systems |
|
|
|
|
|
(b) Aerated
detritus chambers (including air compressor) |
|
|
|
|
|
(c) Mechanically
skimmed oil and grease removal systems |
|
|
|
|
|
(d) Chemical
feed systems and flash mixing equipment |
|
|
|
|
|
(e) Mechanical
flocculators and mechanical reactors |
|
|
|
|
|
(f) Diffused
air/mechanically aerated activated sludge systems |
|
|
|
|
|
(g) Aerated
lagoon systems |
|
|
100 |
100 |
40 |
(h) Biofilters |
|
|
|
|
|
(i) Methane-recovery
anaerobic digester systems |
|
|
|
|
|
(j) Air
floatation systems |
|
|
|
|
|
(k) Air/steam
stripping systems |
|
|
|
|
|
(l) Urea
Hydrolysis systems |
|
|
|
|
|
(m) Marine
outfall systems |
|
|
|
|
|
(n) Centrifuge
for dewatering sludge |
|
|
|
|
|
(o) Rotating
biological contractor or bio-disc |
|
|
|
|
|
(p) Ion
exchange resin column |
|
|
|
|
|
(q) Activated
carbon column |
|
|
|
|
|
|
|
|
|
|
|
(x) (a)
Solidwaste control equipments being - caustic/lime/chrome/mineral/cryolite
recovery systems |
|
|
100 |
100 |
40 |
(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 |
30 |
(xia) Life saving
medical equipment, being— |
|
|
|
|
|
(a) D.C.
Defibrillators for internal use and pace makers |
|
|
|
|
|
(b) Haemodialysors |
|
|
|
|
|
(c) Heart
lung machine |
|
|
|
|
|
(d) Cobalt
Therapy Unit |
|
|
|
|
|
(e) Colour
Doppler |
|
|
|
|
|
(f) SPECT
Gamma Camera |
|
|
|
|
|
(g) Vascular
Angiography System including Digital subtraction Angiography |
|
|
|
|
|
(h) Ventilator
used with anaesthesia apparatus |
|
|
|
|
|
(i) Magnetic
Resonance Imaging System |
|
|
|
|
|
(j) Surgical
Laser [See Note 5B] |
|
|
40 |
40 |
40 |
(k) Ventilators
other than those used with anaesthesia |
|
|
|
|
|
(l) Gamma
knife |
|
|
|
|
|
(m) Bone
Marrow Transplant Equipment including silastic long standing intravenous
catheters for chemotherapy |
|
|
|
|
|
(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 |
|
|
|
|
|
(o) Laparoscope
(single incision) |
|
|
|
|
|
(4) Containers
made of glass or plastic used as re-fills |
|
|
50 |
50 |
40 |
(5) Computers
including computer software [See note 7 below the Table] |
|
|
60 |
60 |
40 |
(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 |
40 |
(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 |
40 |
(8) (i)
Wooden parts used in artificial silk manufacturing machinery |
|
|
100 |
100 |
40 |
(ii) Cinematograph
films - bulbs of studio lights |
|
|
100 |
100 |
40 |
(iii) Match
factories - Wooden match frames |
|
|
100 |
100 |
40 |
(iv) Mines
and quarries : |
|
|
|
|
|
(a) Tubs,
winding ropes, haulage ropes and sand stowing pipes |
|
|
100 |
100 |
40 |
(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 |
40 |
(vi) Flour
mills - Rollers |
|
|
80 |
80 |
40 |
(vii) Iron
and steel industry - Rolling mill rolls |
|
|
80 |
80 |
40 |
(viii) Sugar
works - Rollers |
|
|
80 |
80 |
40 |
(ix) Energy
saving devices, being— |
|
|
|
|
|
A. Specialised boilers
and furnaces: |
|
|
|
|
|
(a) Ignifluid/fluidized
bed boilers |
|
|
|
|
|
(b) Flameless
furnaces and continuous pusher type furnaces |
|
|
|
|
|
(c) Fluidized
bed type heat treatment furnaces |
|
|
80 |
80 |
40 |
(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) |
|
|
|
|
|
B. Instrumentation and
monitoring system for monitoring energy flows: |
|
|
|
|
|
(a) Automatic
electrical load monitoring systems |
|
|
|
|
|
(b) Digital
heat loss meters |
|
|
|
|
|
(c) Micro-processor
based control systems |
|
|
|
|
|
(d) Infra-red
thermography |
|
|
80 |
80 |
40 |
(e) Meters
for measuring heat losses, furnace oil flow, steam flow, electric energy and
power factor meters |
|
|
|
|
|
(f) Maximum
demand indicator and clamp on power meters |
|
|
|
|
|
(g) Exhaust
gases analyser |
|
|
|
|
|
(h) Fuel
oil pump test bench |
|
|
|
|
|
C. Waste heat recovery
equipment: |
|
|
|
|
|
(a) Economisers
and feed water heaters |
|
|
|
|
|
(b) Recuperators
and air pre-heaters |
|
|
80 |
80 |
40 |
(c) Heat
pumps |
|
|
|
|
|
(d) Thermal
energy wheel for high and low temperature waste heat recovery |
|
|
|
|
|
D. Co-generation systems: |
|
|
|
|
|
(a) Back
pressure pass out, controlled extraction, extraction-cum-condensing
turbines for co-generation along with pressure boilers |
|
|
80 |
80 |
40 |
(b) Vapour
absorption refrigeration systems |
|
|
|
|
|
(c) Organic
rankine cycle power systems |
|
|
|
|
|
(d) Low
inlet pressure small steam turbines |
|
|
|
|
|
E. Electrical equipment: |
|
|
|
|
|
(a) Shunt
capacitors and synchronous condenser systems |
|
|
|
|
|
(b) Automatic
power cut off devices (relays) mounted on individual motors |
|
|
|
|
|
(c) Automatic
voltage controller |
|
|
|
|
|
(d) Power
factor controller for AC motors |
|
|
|
|
|
(e) Solid
state devices for controlling motor speeds |
|
|
|
|
|
(f) Thermally
energy-efficient stenters (which require 800 or less kilocalories of heat to
evaporate one kilogram of water) |
|
|
|
|
|
(g) Series
compensation equipment |
|
|
|
|
|
(h) Flexible
AC Transmission (FACT) devices - Thyristor controlled series compensation
equipment |
|
|
80 |
80 |
40 |
(i) Time
of Day (ToD) energy meters |
|
|
|
|
|
(j) Equipment
to establish transmission highways for National Power Grid to facilitate
transfer of surplus power of one region to the deficient region |
|
|
|
|
|
(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 |
|
|
|
|
|
(l) Special
energy meters for Availability Based Tariff (ABT) |
|
|
|
|
|
F. Burners: |
|
|
|
|
|
(a) 0 to
10 per cent excess air burners |
|
|
|
|
|
(b) Emulsion
burners |
|
|
80 |
80 |
40 |
(c) Burners
using air with high pre-heat temperature (above 300°C) |
|
|
|
|
|
G. Other equipment: |
|
|
|
|
|
(a) Wet
air oxidation equipment for recovery of chemicals and heat |
|
|
|
|
|
(b) Mechanical
vapour recompressors |
|
|
|
|
|
(c) Thin
film evaporators |
|
|
|
|
|
(d) Automatic
micro-processor based load demand controllers |
|
|
80 |
80 |
40 |
(e) Coal
based producer gas plants |
|
|
|
|
|
(f) Fluid
drives and fluid couplings |
|
|
|
|
|
(g) Turbo
charges/super-charges |
|
|
|
|
|
(h) Sealed
radiation sources for radiation processing plants |
|
|
|
|
|
(x) Gas cylinders
including valves and regulators |
|
|
80 |
60 |
40 |
(xi) Glass
manufacturing concerns - Direct fire glass melting furnaces |
|
|
80 |
60 |
40 |
(xii) Mineral oil
concerns: |
|
|
|
|
|
(a) Plant
used in field operations (above ground) distribution - Returnable packages |
|
|
|
|
|
(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 |
40 |
(c) Oil
wells not covered in clauses (a) and (b) (with effect from the assessment
year 2016-17) |
|
|
- |
15 |
15 |
(xiii) Renewal
energy devices being— |
|
|
|
|
|
(a) Flat
plate solar collectors |
|
|
|
|
|
(b) Concentrating
and pipe type solar collectors |
|
|
|
|
|
(c) Solar
cookers |
|
|
|
|
|
(d) Solar
water heaters and systems |
|
|
|
|
|
(e) Air/gas/fluid
heating systems |
|
|
|
|
|
(f) Solar
crop driers and systems |
|
|
|
|
|
(g) Solar
refrigeration, cold storages and air-conditioning systems |
|
|
|
|
|
(h) Solar
steels and desalination systems |
|
|
|
|
|
(i) Solar
power generating systems |
|
|
|
|
|
(j) Solar
pumps based on solar-thermal and solar-photovoltaic conversion |
|
|
|
|
|
(k) Solar-photovoltaic
modules and panels for water pumping and other applications |
|
|
80 |
80 |
40 |
(l) Windmills
and any specially designed devices which run on wind-mills installed on or
before March 31, 2012 |
|
|
|
|
|
(m) Any
special devices including electric generators and pumps running on wind
energy installed on or before March 31, 2012 |
|
|
|
|
|
(n) Biogas
plant and biogas engines |
|
|
|
|
|
(o) Electrically
operated vehicles including battery powered or fuel-cell powered vehicles |
|
|
|
|
|
(p) Agricultural
and municipal waste conversion devices producing energy |
|
|
|
|
|
(q) Equipment
for utilising ocean waste and thermal energy |
|
|
|
|
|
(r) Machinery
and plant used in the manufacture of any of the above sub-items |
|
|
|
|
|
(9) (i)
Books owned by assessees carrying on a profession— |
|
|
|
|
|
(a) Books,
being annual publications |
|
|
100 |
100 |
40 |
(b) Books,
other than those covered by entry (a) above |
|
|
60 |
60 |
40 |
(ii) Books
owned by assessees carrying on business in running lending libraries |
|
|
100 |
100 |
40 |
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 |
20 |
(2) Vessels
ordinarily operating on inland waters, not covered by sub-item (3) below |
|
|
25 |
20 |
20 |
(3) Vessels
ordinarily operating on inland waters being speed boats [See Note
10 below the Table] |
|
|
25 |
20 |
20 |
PART
B |
|
|
|
|
|
INTANGIBLE
ASSETS |
|
|
|
|
|
Know-how,
patents, copyrights, trademarks, licences, franchises or any other business
or commercial rights of similar nature not being goodwill of businesss of
profession |
|
|
25 |
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 in Explanation 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.
5A. Rate of depreciation shall
be 40% if conditions of Rule 5(2) are
satisfied.
5B. Applicable from the
Assessment year 2004-05.
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 Textiles vide 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
(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. 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.
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.
Substituted 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 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.
Omitted 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 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."
[As amended by Finance Act, 2024]
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