Rates Of Depreciation Under The Income Tax Act

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

1SCHEDULE II2

(Seesection 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, 2023]

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