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Home » Blog » Income Tax » Depreciation Rates as per Income Tax Act
Depreciation Rates as per Income Tax Act
The complete guide about Depreciation is as follows. Depreciation Rate Chart for AY 201617
helps you know the Rates of depreciation for various assessee types. Read the complete article and
know what is Depreciation, depreciation rates, etc.
What is Depreciation?
Depreciation as per Income Tax Act, 1962 is an allowable deduction from Business or Profession
Income. In short, it has become mandatory to calculate depreciation. The decrease in value of an
asset/property over a period is referred to as Depreciation. If any taxpayer has acquired and used
an asset in their profession or business, he can claim depreciation during the computation of Profits
and Gains of Business/Profession. For depreciation calculation or to know how to calculate
depreciation, Depreciation rates are needed. The depreciation rates as per Income Tax Act for AY
201617, 201718 are as follows.
Depreciation Calculation
Depreciation calculation is done by two methods. One is as per the Companies Act i.e. for
companies, the depreciation is calculated as per the provisions of Companies act. Another method
is as per Income Tax Act i.e. depreciation is calculated as per the provisions Income Tax Act. Here
we have provided the Depreciation rate chart as per Income Tax Act, 1961 for AY 201617 which is
easy for us to calculate.
Income Tax Depreciation Rates applicable from the AY 200304
onwards
Below rates of depreciation are applicable from AY 200304 onwards. That is, for Depreciation
Rates for AY 201617 & Depreciation rates for AY 201718 also you can refer below tables.
http://www.taxqueries.in/incometax/depreciationrates/ 1/16
6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
General Rate of Depreciation as per Income Tax
S. Asset Depreciation
Asset Type
No. Class Rates
Residential buildings excluding boarding houses and hotels. 5%
Purely temporary constructions like wooden structures. 100%
Taxis/Lorries/motor buses used in a business of running them on
30%
hire.
Motorcars excluding those used in a business of running them
15%
on hire.
Computers and computer software. 60%
Plant and
3. Books owned by assessee carrying on a profession being annual
machinery 100%
publications.
Books belonging to assessee carrying on business in running
100%
lending libraries.
Books belonging to assessee carrying on profession not being
60%
annual publications.
Intangible Franchise, patents, trademark, copyright, license, knowhow or
4. 25%
assets other commercial or business rights of similar nature.
Depreciation Rates as per Income Tax Act, 1962
Depreciation Rates as per Income Tax Act, 1962 in depth are given below. The assets are two types
1. Tangible Assets: It covers the Asset class of Building, Furniture and Plant and machinery.
2. Intangible Assets
Part 1: Tangible Assets
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
Depreciation rates for tangible assets are as follows.
Asset Depreciation
S.No. Asset Type
Class Rates
Buildings used primarily for residential reasons (excluding
1. 5%
boarding houses and hotels).
Buildings apart from those used mainly for residential
2. purposes and not covered by subitems 1 (above) and 3 100%
(below).
I. Building Buildings procured on or after 1st September 2002, for
installing machinery and plant forming part of water supply
3. project or water treatment system and which is used for the 100%
business purpose of providing infrastructure facilities under
clause (i) of subsection (4) of section 80IA.
4. Completely temporary erections like wooden structures. 100.00%
II.
Furniture Furniture & fittings including electrical fittings. 10%
& fittings
III. Plant & Plant & machinery excluding those covered by subitems (2),
1. 15%
machinery (3) and (8) below.
Motorcars, except those used in a business of running them
2. 15%
on hire, procured or put to use on or after April 1, 1990.
Motor buses, motor lorries and Motor taxis used in a business
3(ii) 30%
of running them on hire.
Commercial vehicle procured by the taxpayer on or after 1st
October 1998, but before 1st April 1999, and is used for any
period prior to 1st April 1999, for the profession purpose or
3(iii) 40%
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
business purpose in agreement with the third proviso to clause
(ii) of subsection (1) of section 32.
New commercial vehicle which is procured on or after 1st
October 1998, but before 1st April 1999, in replacement of
condemned vehicle of more than 15 years of age and is used
3(iv) 60%
for any period prior to 1st April 1999, for the
profession purpose or business purpose in agreement with the
third proviso to clause (ii) of subsection (1) of section 32.
New commercial vehicle which is procured on or after 1st April
1999, but before 1st April 2000, in replacement of condemned
vehicle of more than 15 years of age and is put to use before
3(v) 60%
1st April 2000, for the profession purpose or
business purpose in agreement with the 2nd proviso to clause
(ii) of subsection (1) of section 32.
New commercial vehicle procured on or after 1st April 2001,
3(vi) but before 1st April 2002, and is put to use before 1st April 50%
2002, for the profession or business purpose.
Air pollution control equipment
Felt.
filter system.
Electrostatic precipitation systems.
3(viii) Scrubber. 100%
counter current / packed bed / venture / cyclonic
scrubbers.
Dust collector systems.
Evacuation system and ash handling system.
Water pollution control equipment
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
Aerated detritus chambers (including air compressor).
Mechanical screen systems.
Mechanically skimmed grease and oil removal systems.
Flash mixing equipment and chemical feed systems.
Mechanical reactors and mechanical flocculation.
Mechanically aerated activated sludge / diffused air
systems.
Biofilters.
Aerated lagoon systems.
Air floatation systems.
3(ix) 30%
Methane.
recovery anaerobic digester systems.
Steam/air stripping systems.
Marine outfall systems.
Urea Hydrolysis systems.
Activated carbon column.
Bio.
disc or rotating biological contractor.
Marine outfall systems.
Ion exchanges resin column.
Centrifuge for dewatering sludge.
(a) Solid waste, control equipment’s –
Mineral / Cryolite /lime / chrome recovery system/ caustic.
3(x) 100%
(b) Resource recovery & solid waste recycling systems.
Plant and machinery used in semiconductor industry covering
ranging from SSI to LSI / VLSI as also discrete semiconductor
3(xi) devices like triacs, diodes, transistors, thyristors, etc., except 30%
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
those covered by entries (viii), (ix), (x) of this subitem and
subitem (8) below.
Life Saving medical equipment
D.C Defibrillators for pacemakers and internal use.
Haemodialysis.
Colour Doppler.
Cobalt therapy unit.
Heartlung machine.
Vascular Angiography System including Digital
subtraction Angiography.
Spect Gamma Camera.
Ventilator used with anaesthesia apparatus.
3 Magnetic Resonance Imaging System.
40%
(xi)a Ventilator besides those used with anaesthesia.
Gamma knife.
Surgical laser.
4. Containers made of plastic or glass used as refills. 50%
5. Computers including computer software. 60%
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
use before April 1, 2004.
Plant & machinery installed and procured on or after 1st
7. supply project and put to use for the business purpose of 100%
providing infrastructure facility under clause (i) of subsection
(4) of section 80IA.
1. Wooden parts used in artificial silk manufacturing
100%
machinery.
2. Match factories: wooden match frames.
3. Cinematograph films: bulbs of studio lights. 100%
4. Salt works – reservoirs, condensers, salt pans, etc., made
of sandy, clayey, or earthy material or any other similar 100%
material.
5. Quarries and mines
Sand stowing pipes, winding ropes, tubs, and haulage
100%
ropes.
Safety lamps.
6. Flour mills – rollers. 80%
7. Sugar works – rollers. 80%
8. Steel and iron industry: rolling mill rolls 80%
9. Energy saving devices. 80%
(A) Furnaces and specialised boilers
Fluidized bed boilers / ignifluid.
Continuous pusher type furnaces and flameless
80%
furnaces.
Highefficiency boilers.
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
Fluidized bed type heat treatment.
(B) Instrumentation and monitoring system for monitoring
energy flows
Digital heat loss meters.
Infrared thermography.
Automatic electrical load monitoring systems.
Microprocessor based control systems. 80%
Exhaust gas analysers.
Meters for measuring steam flow, heat losses, furnace oil
flow, electric energy and power factor meters.
Fuel oil pumps test bench.
Maximum demand indicator and clamp on power meters.
8.
(C) Waste heat recovery equipment
Air preheaters and recuperators.
Feed water heaters and economizers.
80%
Heat pumps.
Thermal energy wheel for low and hightemperature heat
recovery.
(D) Cogeneration systems
Controlled extraction, extraction cum condensing turbines
pressure pass out. 80%
Vapour absorption refrigeration systems.
Organic Rankine cycle power systems.
Low inlet pressure small steam turbines.
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
(E) Electrical equipment
Synchronous condenser systems and shunt capacitors.
Power factor controller for AC motors.
Relays (automatic power cutoff devices).
Solid state devices for controlling motor speeds.
Automatic voltage controller.
Thermally energyefficient stenters.
Flexible AC Transmission devices: Thyristor controlled
series compensation equipment 80%
TOD (Time of Day) energy meters.
Series compensation equipment.
Special energy meters for ABT (Availability Based Tariff).
Intelligent electronic devices/remote terminal units,
(F) Burners
0 to 10 % excess air burners.
Emulsion burners. 80%
Burners using air with high preheat temperature (i.e.
above 300 degrees Celsius).
(G) Other equipment
Mechanical vapour recompressors.
Thin film evaporators.
Wet air oxidation equipment for recovery of heat and
chemicals.
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
Fluid couplings and fluid drives. 80%
Automatic microprocessor based load demand
controllers.
Coal based producer gas plants.
Sealed radiation sources for radiation processing plants.
Supercharges/turbo charges.
10. Gas cylinders including regulators and valves 60%
11. Glass manufacturing concerns being – Direct fire glass
60%
melting furnaces
12. Mineral oil concerns
Plant used in field operations (above ground) distribution
– returnable packages.
Plant used in field operations (below ground), but not 60%
concerns.
13. Renewable energy devices
Pipe type and concentrating solar collectors.
Solar cookers.
Flat plate solar collectors.
Air/fluid/gas heating systems.
Solar crop drivers and systems.
Solar water heaters and systems.
Solar refrigeration, cold storages & air conditioning 60%
systems.
Desalination systems & Solar steels.
Solar power generating systems.
Solarphotovoltaic modules and panels for water
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
pumping & other applications.
Solar pumps based on solarphotovoltaic and solar
thermal conversion.
14. Windmills and any other specially designed devices that
80%
operate on windmills (installed on or after April 1, 2014).
15. Any special devices including electric pumps and
generators operating on wind energy (installed on or after April 80%
1, 2014).
16. Books belonging to assessees carrying on a profession.
(i) Books, being annual publications. 100%
(ii) Books, excluding those covered by entry (i) above. 60%
(iii) Books owned by assessees carrying on business in
100%
running lending libraries.
Oceangoing ships including survey launches, tugs, dredgers,
4(i) barges, and other similar ships used mainly for sighing 20%
vessels with wooden hull and dredging purposes
IV. Ships Vessels ordinarily working on inland waters, not covered by
Home Income Tax
4(ii) Service Tax VAT Central Excise Sales Tax 20%
below subitem (iii)
Professional Tax Vessels ordinarily operating on inland waters being speed
Custom Duty Blog
4(iii) 20%
boats
Part 2: Intangible Assets
Depreciation rates for Intangible assets are as follows.
Asset Depreciation
Asset Type
Class Rates
Intangible Franchise, patents, trademark, copyright, license, knowhow or other
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6/30/2016 Depreciation Rates for AY 201718 as per Income Tax Act, 1961
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