Latest Depreciation Rates as per Income Tax Act and Companies Act

Depreciation on assets is covered under section 32 of the Income tax act. In order to claim depreciation the asset should be used for business or profession and assesse should be owner of such asset. Depreciation on asset is allowed only if assesse is beneficial owner. In case of lease, depreciation is always claimed by lessor whether it is financial lease or operating lease. In case of hire purchase, assesse gets the ownership only after payment of last installment but he can claim depreciation from beginning, assuming assesse is the owner from beginning. Depreciation on asset partially owned by the assesse shall be allowed to him to t extent of his share in asset. In case of stand by machinery and emergency spares, the depreciation shall be allowed even if they are ready for use and not to put use. In this article we will learn about the rates of depreciation on various assets as per Income tax act.

Rates of depreciation as per Income Tax Act:

Below the various rates of depreciation as per Income Tax Act:

Block of assets	Depreciation rate
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
(2) Buildings other than those used mainly for residential purposes and not covered by sub-items (1) above and (3) below	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 80IA	40
(4) Purely temporary erections such as wooden structures	40
II. FURNITURE AND FITTINGS
Furniture and fittings including electrical fittings [See Note 5 below the Table]	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]	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);	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
(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).	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
(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]	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]	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]	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]	40
(vii) Moulds used in rubber and plastic goods factories	30
(viii) Air pollution control equipment, being—
(a) Electrostatic precipitation systems
(b) Felt-filter systems
(c) Dust collector systems	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	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	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	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
(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	40
(5) Computers including computer software [See note 7 below the Table]	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]	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]	40
(8) (i) Wooden parts used in artificial silk manufacturing machinery	40
(ii) Cinematograph films – bulbs of studio lights	40
(iii) Match factories – Wooden match frames	40
(iv) Mines and quarries :
(a) Tubs, winding ropes, haulage ropes and sand stowing pipes	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	40
(vi) Flour mills – Rollers	40
(vii) Iron and steel industry – Rolling mill rolls	40
(viii) Sugar works – Rollers	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	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	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	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	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	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	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	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	40
(xi) Glass manufacturing concerns – Direct fire glass melting furnaces	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	40
(c) Oil wells not covered in clauses (a) and (b) (with effect from the assessment year 2016-17)	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	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	40
(b) Books, other than those covered by entry (a) above	40
(ii) Books owned by assessees carrying on business in running lending libraries	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	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 [See Note 10 below the Table]	20
PART B
INTANGIBLE ASSETS
Know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature	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, demineralization 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.

Rate of depreciation as per Companies Act

Below the various rates of depreciation as per Companies Act:

Nature of Assets	Useful Life	Rate as per SLM	Rate as per WDV
(I) Buildings [NESD]
(a) Building (other than factory buildings) RCC Frame Structure	60	1.58%	4.87%
(b) Building (other than factory buildings) other than RCC Frame Structure	30	3.17%	9.50%
(c) Factory buildings	30	3.17%	9.50%
(d) Fences, wells, tube wells	5	19.00%	45.07%
(e) Other (including temporary structure, etc.)	3	31.67%	63.16%

(II) Bridges, culverts, bunkers, etc. [NESD]	30	3.17%	9.50%
(III) Roads [NESD]
(a) Carpeted Roads
(i) Carpeted Roads – RCC	10	9.50%	25.89%
(ii) Carpeted Roads – other than RCC	5	19.00%	45.07%
(b) Non-carpeted roads	3	31.67%	63.16%
(IV) Plant and Machinery
(a) General rate applicable to Plant and Machinery not covered under Special Plant and Machinery
(i) Plant and Machinery other than continuous process plant not covered under specific	15	6.33%	18.10%
(ii) Continuous process plant for which no special rate has been prescribed under (ii) below	8	11.88%	31.23%
(b) Special Plant and Machinery
(i) 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	13	7.31%	20.58%
2 Projecting equipment for exhibition of films	13	7.31%	20.58%
(ii) Plant and Machinery used in glass
1 Plant and Machinery except direct fire glass melting furnaces – Recuperative and regenerative glass melting furnaces	13	7.31%	20.58%
2 Plant and Machinery except direct fire glass melting furnaces – Moulds [NESD]	8	11.88%	31.23%
3 Float Glass Melting Furnaces [NESD]	10	9.50%	25.89%
(iii) Plant and Machinery used in mines and quarries Portable underground machinery and earth moving machinery used in open cast mining	8	11.88%	31.23%
(iv) Plant and Machinery used in Telecommunications [NESD]
1 Towers	18	5.28%	15.33%
2 Telecom transceivers, switching centers, transmission and other network equipment	13	7.31%	20.58%
3 Telecom – Ducts, Cables and optical fiber	18	5.28%	15.33%
4 Satellites	18	5.28%	15.33%
(v) Plant and Machinery used in exploration, production and refining oil and gas [NESD]
1 Refineries	25	3.80%	11.29%
2 Oil and gas assets (including wells), processing plant and facilities	25	3.80%	11.29%
3 Petrochemical Plant	25	3.80%	11.29%
4 Storage tanks and related equipment	25	3.80%	11.29%
5 Pipelines	30	3.17%	9.50%
6 Drilling Rig	30	3.17%	9.50%
7 Field operations (above ground) Portable boilers, drilling tools, well-head tanks, etc.	8	11.88%	31.23%
8 Loggers	8	11.88%	31.23%
(vi) Plant and Machinery used in generation, transmission and distribution of power [NESD]
1 Thermal / Gas / Combined Cycle Power Generation Plant	40	2.38%	7.22%
2 Hydro Power Generation Plant	40	2.38%	7.22%
3 Nuclear Power Generation Plant	40	2.38%	7.22%
4 Transmission lines, cables and other network assets	40	2.38%	7.22%
5 Wind Power Generation Plant	22	4.32%	12.73%
6 Electric Distribution Plant	35	2.71%	8.20%
7 Gas Storage and Distribution Plant	30	3.17%	9.50%
8 Water Distribution Plant including pipelines	30	3.17%	9.50%
(vii) Plant and Machinery used in manufacture of
1 Sinter Plant	20	4.75%	13.91%
2 Blast Furnace	20	4.75%	13.91%
3 Coke Ovens	20	4.75%	13.91%
4 Rolling mill in steel plant	20	4.75%	13.91%
5 Basic Oxygen Furnace Converter	25	3.80%	11.29%
(viii) Plant and Machinery used in manufacture of nonferrous metals
1 Metal pot line [NESD]	40	2.38%	7.22%
2 Bauxite crushing and grinding section	40	2.38%	7.22%
3 Digester Section [NESD]	40	2.38%	7.22%
4 Turbine [NESD]	40	2.38%	7.22%
5 Equipments for Calcinations [NESD]	40	2.38%	7.22%
6 Copper Smelter [NESD]	40	2.38%	7.22%
7 Roll Grinder	40	2.38%	7.22%
8 Soaking Pit	30	3.17%	9.50%
9 Annealing Furnace	30	3.17%	9.50%
10 Rolling Mills	30	3.17%	9.50%
11 Equipments for Scalping, Slitting, etc. [NSED]	30	3.17%	9.50%
12 Surface Miner, Ripper Dozer, etc. used in mines	25	3.80%	11.29%
13 Copper refining plant [NSED]	25	3.80%	11.29%
(ix) 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	7.31%	20.58%
2 Other Equipments	15	6.33%	18.10%
(x) Plant and Machinery used in manufacture of pharmaceuticals and chemicals [NESD]
1 Reactors	20	4.75%	13.91%
2 Distillation Columns	20	4.75%	13.91%
3 Drying equipments / Centrifuges and Decanters	20	4.75%	13.91%
4 Vessel / Storage tanks	20	4.75%	13.91%
(xi) Plant and Machinery used in civil construction
1 Concreting, Crushing, Piling Equipments and Road Making Equipments	12	7.92%	22.09%
2 Heavy Lift Equipments –
– Cranes with capacity more than 100 tons	20	4.75%	13.91%
– Cranes with capacity less than 100 tons	15	6.33%	18.10%
3 Transmission line, Tunneling Equipments [NESD]	10	9.50%	25.89%
4 Earth-moving equipments	9	10.56%	28.31%
5 Others including Material Handling / Pipeline / Welding Equipments [NESD]	12	7.92%	22.09%
(xii) Plant and Machinery used in salt works [NESD]	15	6.33%	18.10%
(V) Furniture and fittings [NESD]
(a) General furniture and fittings	10	9.50%	25.89%
(b) Furniture and fittings used in hotels, restaurants and boarding houses, schools, colleges and other education institutions, libraries, welfare centers, meeting halls, cinema houses, theatres and circuses and furniture and fittings let out on hire for used on occasion of marriages and similar functions	8	11.88%	31.23%
(VI) Motor Vehicles [NESD]
(a) Motor cycles, scooters and other mopeds	10	9.50%	25.89%
(b) Motor buses, motor lorries, motor cars and motor taxies used in a business of running them on hire	6	15.83%	39.30%
(c) Motor buses, motor lorries, motor cars and motor taxies other than those used in a business of running them on	8	11.88%	31.23%
(d) Motor tractors, harvesting combines and heavy vehicles	8	11.88%	31.23%
(e) Electrically operated vehicles	8	11.88%	31.23%
(VII) Ships [NESD]
(a) Ocean-going ships
(i) Bulk Carriers and liner vessels	25	3.80%	11.29%
(ii) Crude tankers, product carriers and easy chemical carriers with or without conventional	20	4.75%	13.91%
(iii) Chemicals and Acid Carriers
1 With Stainless steel tanks	25	3.80%	11.29%
2 With other tanks	20	4.75%	13.91%
(iv) Liquefied gas carriers	30	3.17%	9.50%
(v) Conventional large passenger vessels which are used for cruise purpose also	30	3.17%	9.50%
(vi) Coastal service ships of all categories	30	3.17%	9.50%
(vii) Offshore supply and support vessels	20	4.75%	13.91%
(viii) Catamarans and other high speed passenger for ships or boats	20	4.75%	13.91%
(ix) Drill ships	25	3.80%	11.29%
(x) Hovercrafts	15	6.33%	18.10%
(xi) Fishing vessels with wooden hull	10	9.50%	25.89%
(xii) Dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging	14	6.79%	19.26%
(b) Vessels ordinarily operating on inland waters
(i) Speed boats	13	7.31%	20.58%
(ii) Other vessels	28	3.39%	10.15%
(VIII) Aircrafts or Helicopters [NESD]	20	4.75%	13.91%
(IX) Railway siding, locomotives, rolling stocks, tramways and railway used by concerns, excluding railway	15	6.33%	18.10%
(X) Ropeway structures [NESD]	15	6.33%	18.10%
(XI) Office equipments [NESD]	5	19.00%	45.07%
(XII) Computers and data processing units [NESD]
(a) Servers and networks	6	15.83%	39.30%
(b) End user devices, such as, desktops, laptops, etc.	3	31.67%	63.16%
(XIII) Laboratory equipment [NESD]
(a) General laboratory equipment	10	9.50%	25.89%
(b) Laboratory equipments used in education institutions	5	19.00