I would like to know the latest deprecion rates as per IT & Companies Act ?
From India, Kochi
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1From India, Kochi
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if assest is used 180 less than then take dep is 50% & more than 180 days then take full percentage of deprication as per the income tax rule
From India, Mumbai
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From India, Mumbai
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if assest is used 180 less than then take dep is 50% & more than 180 days then take full percentage of deprication as per the income tax rule
From India, Mumbai
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From India, Mumbai
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COMMONLY USED DEDUCTIONS FROM PROFIT EARNED DURING THE PREVIOUS YEAR
Rent rates repairs and insurance for buildings: Actual amount spent. In case the assessee owns the building, no deduction is allowed on account of notional rent.
Repairs and insurance of machinery, plant, and furniture: All actual current expenditure is allowed as a deduction. In case the expenditure creates an advantage of an enduring nature or creates a new capital asset, the expenditure is of capital nature, and depreciation on the new asset created is allowed.
Depreciation: Depreciation as per the Income Tax Act, 1961, is allowed on the written down value method on the basis of the block of assets. From the assessment year 1998 - 99, depreciation will be available according to the straight-line method in the case of an undertaking engaged in the generation or generation and distribution of power.
Block Particulars Rate
1 Buildings – residential other than those covered in block 3. 5
2 Buildings – factory, godowns, or buildings not mainly used for residential purposes and other than those covered under block 3. 10
3 Buildings – used as hotels, dwelling units each within plinth area not exceeding 80 sq. mts. 20
4 Buildings – temporary erections such as wooden structures. 100
5 Furniture – all other than covered in block 6. 10
6 Furniture – furniture and fittings used in hotels, restaurants and boarding houses, schools, colleges and other educational institutions, libraries, welfare centers, meeting halls, cinema houses/theaters, and circuses, and furniture and fittings let out in hire for use on the occasion of marriages and similar functions. 15
7 Plant and machinery – all other than those covered in block 8, 9, 10, 11, 12, or 13. 25
8 Plant and machinery – the following three: Motor cars other than those used in a business of running them on hire, acquired or put to use on or after April 1, 1990. Ocean-going ships including dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes and fishing vessels with wooden hull; Vessels ordinarily operating on inland water being speed boats. 20
9 Plant and machinery – buses, lorries, and taxis used in the business of running them on hire, aeroplanes and machinery used in semi-conductor industry and plant or machinery which satisfies conditions of rule 5(2). Further, it includes a commercial vehicle acquired after September 30, 1998, but before April 1, 1999. 40
10 Plant and machinery – containers made of glass or plastic used as refills. 50
11 Plant and machinery – computers and commercial vehicle acquired in replacement of condemned vehicle of 15 years of age which is put to use before April 1, 1999 (if acquired during October 1, 1999, and March 31, 1999) or before April 1, 2000 (if acquired during 1999 - 2000). 60
12 Plant and machinery – air pollution control equipment; water pollution control equipment; recycling and resource recovery systems; wooden parts used in artificial silk manufacturing machinery; cinematography films, bulbs of studio lights, rollers in flour mills, sugar works and steel industry, gas cylinders, wooden match frames, plant used in field operations by mineral oil concerns, some plants used in mines, quarries and saltworks, direct fire glass melting furnaces, and books owned by an assessee carrying on a profession or business in running lending libraries. 100
13 Plant and machinery – ships being vessels ordinarily operating on inland waters other than speed boats. 10
14 Know-how – acquired after March 31, 1998. 25
15 Patents – acquired after March 31, 1998. 25
16 Copyrights – acquired after March 31, 1998. 25
17 Trademarks – acquired after March 31, 1998. 25
18 Licenses – acquired after March 31, 1998. 25
19 Franchises – acquired after March 31, 1998. 25
20 Other rights – acquired after March 31, 1998. 25
When the asset is put to use for less than 180 days in the year of acquisition, then the rate of depreciation applicable is 50% of the amount calculated at the percentage prescribed in the case of a block of assets comprising that asset.
Amortization of preliminary expenses: 5% of the cost of the project is allowed as preliminary expenses. 1/5th of the qualifying expenditure is allowable as a deduction in each of the 5 successive years beginning with the year in which the business commences or, as the case may be, the previous year in which the extension of the industrial undertaking is completed or the new industrial unit commences production or operation.
Amortization of expenditure in the case of amalgamation/demerger: Where an assessee, being an Indian company, incurs expenditure on or after April 1, 1999, wholly and exclusively for the purpose of amalgamation or demerger, the assessee shall be allowed a deduction equal to 1/5th of such expenditure for 5 successive previous years beginning with the previous year in which amalgamation or demerger takes place.
Insurance premium: Any amount of premium paid in respect of insurance against the risk of damage or destruction of stocks or stores used for the purpose of business or profession is allowable as a deduction.
Insurance premium on the health of employees: If a taxpayer pays a premium to keep in force insurance on the health of employees, and the premium is paid by cheque under a scheme framed by the GIC and approved by the central government, such expenditure is allowed as a deduction.
Bonus or commission to employees: Is allowed as a deduction provided it is not payable to him as profit or dividend if it had not been payable as bonus or commission. It is available in the year of payment.
Interest on borrowed capital for the purpose of business is an allowable deduction.
Employer's contribution to a recognized provident fund and approved superannuation fund is allowable to the extent it is actually paid.
Contribution towards an approved gratuity fund is allowed a deduction on a payment basis. It should be paid before the due date for furnishing a return of income under section 139(1) and before any due date by which the assessee is required as an employer to credit such contribution by law or contract.
Employee's contribution to staff welfare schemes if credited to the fund before the due date as set by any law or contract is allowable as a deduction.
Bad Debts are allowed a deduction subject to the following conditions: The debt has been taken into account in computing the income of the assessee of that previous year or of an earlier previous year, or represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee; It has been written off as irrecoverable in the accounts of the assessee for that previous year.
Family planning expenditure incurred by a company for the purpose of promoting family planning among its employees is allowable as a deduction. If the expenditure is capital in nature, it can be amortized over a period of five years.
Entertainment expenditure to be allowed must not be capital or personal in nature, incurred in the previous year, in respect of the business carried on by the assessee and not incurred for any purpose which is an offense or is prohibited by any law.
Advertisement expenditure to be allowed must not be capital or personal in nature, incurred in the previous year, in respect of the business carried on by the assessee and not incurred for any purpose which is an offense or is prohibited by any law. However, no expenditure is allowable concerning expenditure incurred by an assessee on advertisement in any souvenir, brochure, tract, pamphlet, or the like published by a political party.
Travelling expenses to be allowed must not be capital or personal in nature, incurred in the previous year, in respect of the business carried on by the assessee and not incurred for any purpose which is an offense or is prohibited by any law.
Expenses deductible from commission earned of life insurance agents, UTI agents, post office/government securities agents, and agents of notified mutual funds. Where commission earned is less than Rs. 60,000, the deduction allowed is as shown in the table below:
Commission Ad hoc deduction Maximum deduction
LIC Agents 1st year's commission. Renewal commission. 1st year's commission and renewal commission where separate figures are not available. Bonus commission. 50% of 1st-year comm. 15% of renewal comm. 331/3rd of combined comm. No deduction 20,000 in respect of 1.1 and 1.2 or 1.3 Zero
Agents of UTI Commission received by authorized agents 50% of such commission Not specified.
Agents of specified securities Commission received by authorized agents 50% of such commission Not specified.
Agents of notified mutual fund under section 10(23D) Commission received by authorized agents 50% of such commission Not specified.
Where commission earned is more than Rs. 60,000, no ad hoc deduction is allowed; the deduction allowed will be as per provisions 30 to 43B of the Income Tax Act 1961.
General deductions: Any expenditure not covered under sections 30 to 36 is deductible under s. 37 if the expenditure is not capital or personal in nature, incurred in the previous year, in respect of the business carried on by the assessee, and not incurred for any purpose which is an offense or is prohibited by any law.
AMOUNTS EXPRESSLY DISALLOWED UNDER THE ACT:
No deduction is permissible in respect of any expenditure or allowance under sections 28 to section 44C
From India, Hyderabad
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Rent rates repairs and insurance for buildings: Actual amount spent. In case the assessee owns the building, no deduction is allowed on account of notional rent.
Repairs and insurance of machinery, plant, and furniture: All actual current expenditure is allowed as a deduction. In case the expenditure creates an advantage of an enduring nature or creates a new capital asset, the expenditure is of capital nature, and depreciation on the new asset created is allowed.
Depreciation: Depreciation as per the Income Tax Act, 1961, is allowed on the written down value method on the basis of the block of assets. From the assessment year 1998 - 99, depreciation will be available according to the straight-line method in the case of an undertaking engaged in the generation or generation and distribution of power.
Block Particulars Rate
1 Buildings – residential other than those covered in block 3. 5
2 Buildings – factory, godowns, or buildings not mainly used for residential purposes and other than those covered under block 3. 10
3 Buildings – used as hotels, dwelling units each within plinth area not exceeding 80 sq. mts. 20
4 Buildings – temporary erections such as wooden structures. 100
5 Furniture – all other than covered in block 6. 10
6 Furniture – furniture and fittings used in hotels, restaurants and boarding houses, schools, colleges and other educational institutions, libraries, welfare centers, meeting halls, cinema houses/theaters, and circuses, and furniture and fittings let out in hire for use on the occasion of marriages and similar functions. 15
7 Plant and machinery – all other than those covered in block 8, 9, 10, 11, 12, or 13. 25
8 Plant and machinery – the following three: Motor cars other than those used in a business of running them on hire, acquired or put to use on or after April 1, 1990. Ocean-going ships including dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes and fishing vessels with wooden hull; Vessels ordinarily operating on inland water being speed boats. 20
9 Plant and machinery – buses, lorries, and taxis used in the business of running them on hire, aeroplanes and machinery used in semi-conductor industry and plant or machinery which satisfies conditions of rule 5(2). Further, it includes a commercial vehicle acquired after September 30, 1998, but before April 1, 1999. 40
10 Plant and machinery – containers made of glass or plastic used as refills. 50
11 Plant and machinery – computers and commercial vehicle acquired in replacement of condemned vehicle of 15 years of age which is put to use before April 1, 1999 (if acquired during October 1, 1999, and March 31, 1999) or before April 1, 2000 (if acquired during 1999 - 2000). 60
12 Plant and machinery – air pollution control equipment; water pollution control equipment; recycling and resource recovery systems; wooden parts used in artificial silk manufacturing machinery; cinematography films, bulbs of studio lights, rollers in flour mills, sugar works and steel industry, gas cylinders, wooden match frames, plant used in field operations by mineral oil concerns, some plants used in mines, quarries and saltworks, direct fire glass melting furnaces, and books owned by an assessee carrying on a profession or business in running lending libraries. 100
13 Plant and machinery – ships being vessels ordinarily operating on inland waters other than speed boats. 10
14 Know-how – acquired after March 31, 1998. 25
15 Patents – acquired after March 31, 1998. 25
16 Copyrights – acquired after March 31, 1998. 25
17 Trademarks – acquired after March 31, 1998. 25
18 Licenses – acquired after March 31, 1998. 25
19 Franchises – acquired after March 31, 1998. 25
20 Other rights – acquired after March 31, 1998. 25
When the asset is put to use for less than 180 days in the year of acquisition, then the rate of depreciation applicable is 50% of the amount calculated at the percentage prescribed in the case of a block of assets comprising that asset.
Amortization of preliminary expenses: 5% of the cost of the project is allowed as preliminary expenses. 1/5th of the qualifying expenditure is allowable as a deduction in each of the 5 successive years beginning with the year in which the business commences or, as the case may be, the previous year in which the extension of the industrial undertaking is completed or the new industrial unit commences production or operation.
Amortization of expenditure in the case of amalgamation/demerger: Where an assessee, being an Indian company, incurs expenditure on or after April 1, 1999, wholly and exclusively for the purpose of amalgamation or demerger, the assessee shall be allowed a deduction equal to 1/5th of such expenditure for 5 successive previous years beginning with the previous year in which amalgamation or demerger takes place.
Insurance premium: Any amount of premium paid in respect of insurance against the risk of damage or destruction of stocks or stores used for the purpose of business or profession is allowable as a deduction.
Insurance premium on the health of employees: If a taxpayer pays a premium to keep in force insurance on the health of employees, and the premium is paid by cheque under a scheme framed by the GIC and approved by the central government, such expenditure is allowed as a deduction.
Bonus or commission to employees: Is allowed as a deduction provided it is not payable to him as profit or dividend if it had not been payable as bonus or commission. It is available in the year of payment.
Interest on borrowed capital for the purpose of business is an allowable deduction.
Employer's contribution to a recognized provident fund and approved superannuation fund is allowable to the extent it is actually paid.
Contribution towards an approved gratuity fund is allowed a deduction on a payment basis. It should be paid before the due date for furnishing a return of income under section 139(1) and before any due date by which the assessee is required as an employer to credit such contribution by law or contract.
Employee's contribution to staff welfare schemes if credited to the fund before the due date as set by any law or contract is allowable as a deduction.
Bad Debts are allowed a deduction subject to the following conditions: The debt has been taken into account in computing the income of the assessee of that previous year or of an earlier previous year, or represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee; It has been written off as irrecoverable in the accounts of the assessee for that previous year.
Family planning expenditure incurred by a company for the purpose of promoting family planning among its employees is allowable as a deduction. If the expenditure is capital in nature, it can be amortized over a period of five years.
Entertainment expenditure to be allowed must not be capital or personal in nature, incurred in the previous year, in respect of the business carried on by the assessee and not incurred for any purpose which is an offense or is prohibited by any law.
Advertisement expenditure to be allowed must not be capital or personal in nature, incurred in the previous year, in respect of the business carried on by the assessee and not incurred for any purpose which is an offense or is prohibited by any law. However, no expenditure is allowable concerning expenditure incurred by an assessee on advertisement in any souvenir, brochure, tract, pamphlet, or the like published by a political party.
Travelling expenses to be allowed must not be capital or personal in nature, incurred in the previous year, in respect of the business carried on by the assessee and not incurred for any purpose which is an offense or is prohibited by any law.
Expenses deductible from commission earned of life insurance agents, UTI agents, post office/government securities agents, and agents of notified mutual funds. Where commission earned is less than Rs. 60,000, the deduction allowed is as shown in the table below:
Commission Ad hoc deduction Maximum deduction
LIC Agents 1st year's commission. Renewal commission. 1st year's commission and renewal commission where separate figures are not available. Bonus commission. 50% of 1st-year comm. 15% of renewal comm. 331/3rd of combined comm. No deduction 20,000 in respect of 1.1 and 1.2 or 1.3 Zero
Agents of UTI Commission received by authorized agents 50% of such commission Not specified.
Agents of specified securities Commission received by authorized agents 50% of such commission Not specified.
Agents of notified mutual fund under section 10(23D) Commission received by authorized agents 50% of such commission Not specified.
Where commission earned is more than Rs. 60,000, no ad hoc deduction is allowed; the deduction allowed will be as per provisions 30 to 43B of the Income Tax Act 1961.
General deductions: Any expenditure not covered under sections 30 to 36 is deductible under s. 37 if the expenditure is not capital or personal in nature, incurred in the previous year, in respect of the business carried on by the assessee, and not incurred for any purpose which is an offense or is prohibited by any law.
AMOUNTS EXPRESSLY DISALLOWED UNDER THE ACT:
No deduction is permissible in respect of any expenditure or allowance under sections 28 to section 44C
From India, Hyderabad
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