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Depreciation rates under Income Tax Act 

 

It is a provision that allows businesses to claim a deduction for the decrease in value of tangible assets used in their business operations over time. The Act provides for different rates of depreciation for different types of assets, which are specified under various schedules

Block of Assets

TANGIBLE ASSETS

 Allowance rate
(WDV)

 

         Building

 a) Buildings used for residential purpose (excluding hotels and boarding houses) 5
b) Buildings other than residential purposes and not covered by sub items (1) above and (3) below 10
c)

Buildings purchased on or after September 1, 2023, for the purpose of installing equipment and machinery for a water supply project or water treatment system, and which are utilised for the business of providing infrastructure facilities as defined by clause (i) of sub-section (4) of section 80-IA

 

 40
d) Purely temporal constructions like wooden structures 40
Furniture and Fittings   Furniture and fittings, such as electrical fittings 10
Plant and Machinery 1(a) Plant and machinery other than those covered by sub items (2), (3) and (8) below 15
  2(a) Motor cars (except from those operated for hire purposes) bought or used on or after April 1, 1990 15
  2(b) Motor cars (bought on or after August 23, 2019, but before April 1, 2020, and used prior to April 1, 2020) 30
  3(a) Aeroplanes and Aero Engines 40
  3(b) (i) Vehicles like motor taxi, bus, and truck used in rental business 30
  3(b) (ii) Vehicles used for operating motor buses, motor lorries, and motor taxis for hire that were purchased between August 23, 2019, and April 1, 2020, and operated prior to that date 45
  3(c) Commercial vehicles purchased on or after October 1, 1998, but before April 1, 1999, and used for business or work prior to April 1, 1999, as per section 32 40
  3(d) New commercial vehicles acquired on or after October 1, 1998, but before April 1, 1999, in accordance with section 32, to replace condemned cars over 15 years old and used for business or work before April 1, 1999 40
  3(e) New commercial vehicles acquired on or before April 1, 1999, but before April 1, 2000, to replace cars over 15 years old that were condemned and used for work or business purposes prior to April 1, 2000, in accordance with section 32 40
  3(f) New commercial cars purchased before April 1, 2002, but before April 1, 2001, and used for work or business prior to April 1, 2002 40
  3(f)(i) New commercial vehicles purchased for business or work used between January 1, 2009, and October 1, 2009, and utilised prior to October 1, 2009 40
  3(g) Moulds used in factories          rubber and plastic goods 30
  3(h)

Air pollution control equipment, like

●        Electrostatic precipitation systems

●      Dust collector systems

●      Felt-filter systems

●      Scrubbers, counter current/packed bed/venture/cyclonic scrubbers

●      Evacuation system and ash handling system

 

 

 40
  3(i)

Water pollution control equipments, such as

●      Biofilters

●      Aerated lagoon systems

●      Aerated detritus chambers

●      Mechanical screen systems

●      Mechanically skimmed oil and grease removal systems

●      Mechanical flocculators and mechanical reactors

●      Chemical feed systems and flash mixing equipment

●      Diffused air/mechanically aerated activated sludge systems

●      Methane-recovery anaerobic digester systems

●      Air floatation systems

●      Air/steam stripping systems

●      Marine outfall systems

●      Urea Hydrolysis systems

●      Centrifuge for dewatering sludge

●      Rotating biological contractor or bio-disc

●      Ion exchange resin column

●      Activated carbon column

 

 

 

 

 

 

 

 

 

 

 

 

 

40

 

 

 

 

 
  3(x) (a) Solid Waste control equipments like – caustic/ lime/chrome/mineral/cryolite recovery systems 40
  3(x) (b) Solid waste recycling and resource recovery systems 40
  3(xi)

Equipment and machinery used in the semi-conductor industry, encompassing all integrated circuits (ICs) (not hybrid ICs) from small scale integration (SSI) to large scale integration/very large-scale integration (LSI/VLSI) as well as discrete semi-conductor devices like diodes, transistors, thyristors, triacs, etc., not included in entries (viii), (ix), and (x) of this sub-item and sub-item (8) below

 

30
  3(xi)(a)

Life saving medical equipment, like

●      Heart lung machine

●      Cobalt Therapy Unit

●      Colour Doppler

●      SPECT Gamma Camera

●      DC pace makers and internal defibrillators

●      Haemodialysors

●      Ventilators used with and without  anaesthesia apparatus

●      Vascular Angiography system with Digital subtraction Angiography

●      Magnetic Resonance Imaging system

●      Surgical Laser

●      Gamma Knife

●      Equipment used in bone marrow transplantation, such as long-lasting, flexible IV catheters for chemotherapy

●      Fibre optic endoscopes, such as the paediatric resectoscope and audit resectoscope, peritoneoscopes, arthroscopes, microlaryngoscopes, fibroptic flexible laryngobronchoscopes, video laryngobronchoscopes, video oesophago gastroscopes, stroboscopic, and fibroptic flexible oesophago gastroscopes

●      Laparoscope (single incision)

 

 

 

 

 

 

 

 

 

 

 

 

 40
  4 Refillable containers made of glass or plastic 40
  5 Computers including computer software 40
  6 The textile industry’s machinery and plant used for weaving, processing, and garment production that is purchased under TUFS on or after April 1, 2001, but before April 1, 2004, and used prior to April 1, 2004

40
  7 Machinery that is purchased and installed in a water supply project or water treatment system on or after September 1, 2002, and that is used in the business of providing infrastructural facilities as defined by clause (i) of sub-section (4) of section 80-IA

 

 40
  8(i) Wooden parts utilized in artificial silk manufacturing machinery 40
  8(ii) Cinematograph films – bulbs of studio lights 40
  8(iii) Match factories – Wooden match frames 40
  8(iv)

Mines and queries

●      Tubs, winding ropes, haulage ropes and sand stowing pipes

●      Safety lamps

 

40
  8(v) Pots and pans for salt, reservoirs, condensers, and other similar structures constructed of earthy, sandy, or clayey materials

 

40
  8(vi) Flour mills – Rollers 40
  8(vii) Iron and steel industry – Rolling mill rolls 40
  8(viii) Sugar works – Rollers 40
  8(ix)

Energy saving devices, like

  1. Specialised boilers and furnaces
    1. Ignifluid/ fluidized bed boilers
    2. Flameless furnaces and continuous pusher type furnaces
    3. Fluidised bed type heat treatment furnaces
    4. Boilers with high efficiency (thermal efficiency greater than 75% for coal-fired boilers and 80% for oil/gas-fired boilers)
  2. Monitoring system and instrumentation for energy flow monitoring:
    1. Microprocessor-based control systems
    2. Digital heat loss metres
    3. Automatic electrical load monitoring systems
    4. Infra-red thermography
    5. Electric energy and power factor metres, heat loss metres, steam and furnace oil flow metres
    6. Clamp on power metres and maximum demand indicator
    7. Gas analyzer for exhaust
    8. Bench test for fuel oil pumps
  3. Waste heat recovery equipment
    1. Heat pumps
    2. Recuperators and air pre-heaters
    3. Thermal energy wheel for high and low temperature waste heat recovery
    4. Economisers and feed water heaters
  4. Co-generation systems
    1. Pressure boilers, extraction-cum-condensing turbines, controlled extraction, and back pressure pass out are all used in cogeneration.
    2. Low inlet pressure small steam turbines
    3. Vapour absorption refrigeration systems
    4. Organic rankine cycle power systems
  5. Electrical equipment
    1. Series compensation equipment
    2. Automatic voltage controller
    3. Automatic power cut off devices mounted on individual motors
    4. Shunt capacitors and synchronous condenser systems
    5. Power factor controller for AC motors
    6. Solid state devices for controlling motor speeds
    7. Flexible AC Transmission (FACT) devices – Thyristor controlled series compensation equipment
    8. Time of Day (ToD) energy meters
    9. Thermally energy-efficient stenters: one kilogramme of water evaporates with 800 kilocalories of heat or less.
    10. The equipment needed for supervisory control and data acquisition systems, energy management systems, distribution management systems for power transmission systems, remote terminal units/intelligent electronic devices, computer hardware/software, routers/bridges, and other necessary accessories
    11. Availability-based tariff-specific energy metres (ABT)
    12. Tools to build National Power Grid transmission routes so that excess power from one region can be transferred to the region that needs it most.
  6. Burners
    1. Emulsion burners
    2. 0-10 percent excess air burners
    3. Burners using air with high pre-heat temperature (above 300°C)
  7. Other equipment
    1. Fluid drives and fluid couplings
    2. Thin film evaporators
    3. Mechanical vapour recompressors
    4. Wet air oxidation equipment for recovery of chemicals and heat
    5. Automatic micro-processor based load demand controllers
    6. Coal based producer gas plants
    7. Turbo charges/super-charges
    8. Sealed radiation sources for radiation processing plants

 

 

40 

 

 

 

 

40

 

 

 

 

 

 

 

 

 40

 

 

 

 

 40

 

 

 

 

 

 40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 40

 

 

 

 

 

40
  8(x) Gas cylinders including valves and regulators 40
  8(xi) Glass manufacturing concerns – Direct fire glass melting furnaces 40
  8(xii)

Mineral oil concerns

  1. Plant used for distribution in field activities (above ground) – Refundable goods
  2. Equipment utilized for field operations (below ground), except kerbside pumps, underground tanks, and fittings utilised for field operations (distribution) by mineral oil companies
  3. Oil wells that are not covered by clauses (a) and (b) (effective as of assessment year 2016–17)

 

40

40

 

15
  8(xiii)

Renewal energy devices like

  1. Solar cookers
  2. Solar water heaters and systems
  3. Flat plate solar collectors
  4. Concentrating and pipe type solar collectors
  5. Air/gas/fluid heating systems
  6. Solar crop driers and systems
  7. Solar refrigeration,cold storages and air-conditioning systems
  8. Solar steels and desalination systems
  9. Solar power generating systems
  10. Solar pumps based on solar- thermal and solar-photovoltaic conversion
  11. Solar-photovoltaic modules and panels for water pumping and other applications
  12. Windmills and any specially designed devices which run on wind-mills installed on or before March 31, 2012
  13. Any special devices including electric generators and pumps running on wind energy installed on or before March 31, 2012
  14. Biogas plant and biogas engines
  15. Electrically operated vehicles including battery powdered or fuel-cell powered vehicles
  16. Agricultural and municipal waste conversion devices producing energy
  17. Equipment for utilising ocean waste and thermal energy
  18. Machinery and plant used in the manufacture of any of the above sub-items

 

 

 

 

 

 

 

 

 40
  9(i)

Books owned by assessees carrying on a profession

  1. Books, being annual publications
  2. Books, other than those covered by entry (a) above

Books owned by assessees carrying on business in running lending libraries

 

 

40

 

 
Ships 1 Ocean-going vessels having wooden hulls used mostly for fishing and dredging, such as tugs, barges, survey launches, and dredgers.

 

20
  2 Vessels ordinarily operating on inland waters, not covered by sub-item (3) below

 

20
  3 Vessels ordinarily operating on inland waters being speed boats 20
INTANGIBLE ASSETS  
 Intangible Assets  1 Patents, copyrights, trademarks, know-how, licences, franchises, and any other business or commercial rights of similar types that are not the goodwill of professional businesses

 

 25