Lorries/taxis/motor buses used in a business of running them on hire purchased on or after 23 August 2019 but before the 1 April 2020 and is put to use before 1 April 2020īooks owned by assessee carrying on a profession being annual publicationsīooks owned by assessee carrying on profession not being annual publicationsīooks owned by assessee carrying on business in running lending librariesįranchise, trademark, patents, license, copyright, know-how or other commercial or business rights of similar natureĭepreciation Rates as per the Income Tax Act (Comprehensive Chart) Lorries/taxis/motor buses used in a business of running them on hire Motor cars excluding those used in a business of running them on hire purchased on or after 23 August 2019 but before the 1 April 2020 and is put to use before 1 April 2020 Motor cars excluding those used in a business of running them on hire Purely temporary constructions like wooden structuresĪny fittings / furniture including electrical fittings Residential buildings not including boarding houses and hotels In such cases, the lessee can exercise the rights of the owner in his own right and hence the depreciation is allowed to be taken by the lessee.ĭepreciation Rates for FY 2023-24 for Most Commonly Used Assets Sl. In case of a finance lease transaction, the lessee has to capitalise the assets in its books as per AS-19 – the Accounting Standard on Leases.It shall be apportioned based on the number of days the assets were used by such companies. The aggregate depreciation would be computed as if the amalgamation or demerger had not taken place. In the case of amalgamation or demerger, the aggregate depreciation allowance shall be apportioned between the amalgamating and the amalgamated company, or the demerged and the resulting company.Except in the case of undertakings engaged in power generation or its generation and distribution, such undertaking has an option to claim depreciation on WDV method or Straight-Line method – if such option is exercised before the due date of filing the return.The depreciation rates are given in Appendix 1. The depreciation is calculated under the WDV method.Where the asset is acquired in an earlier year, the WDV shall be equal to the actual cost incurred less depreciation actually allowed under the Act.Where the asset is acquired in the previous year, the actual cost of the asset shall be treated as WDV.In the context of computing depreciation, it is important to understand the meaning of the term ‘WDV’ & ‘Actual Cost’. Written Down Value or WDV of Assets - MeaningĪs per Section 32(1) of the IT Act depreciation should be computed at the prescribed percentage on the WDV of the asset, which in turn is calculated with reference to the actual cost of the assets. Therefore, depreciation rates prescribed under the Income Tax Act are only allowed irrespective of the depreciation rates charged in the books of accounts. Depreciation under the Companies Act, 1956 is different from that of.If opted for presumptive taxation scheme, the deemed profit is said to have considered the effect of depreciation.That is, the taxpayer can carry forward the WDV after reducing the depreciation amount. 2002-03 and shall be allowed or deemed to have been allowed as a deduction irrespective of a claim made by a taxpayer in the profit & loss account. You cannot claim depreciation on Goodwill and cost of land.Co-owners can claim depreciation to the extent of the value of the assets owned by each co-owner. The Income Tax Officer also has the right to determine the proportionate part of the depreciation under Section 38 of the Act. If the assets are not used exclusively for the business, but for other purposes as well, depreciation allowable would be proportionate to the use of business purpose.
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