Rate of Depreciation as per Income Tax Act:
Depreciation rate used for section 32 of the Income Tax act is as follows:
Depreciation in Income tax is to be charged as per section 32 at the Written Down Value (i.e. WDV) of the block of asset. In income tax Block of asset concept is followed and depreciation is charged on WDV of entire block and not single asset. Do remember that depreciation will only be charged if the asset is used for business purpose or in some cases renting business other than Income from house property.
Now let’s see which are different block in Income tax and what are it’s rate of depreciation. After a recent notification in 2016 the maximum rate of depreciation in Income tax was restricted to 40%.
Link to download the notification:
//www.incometaxindia.gov.in/communications/notification/notification103_2016.pdf
The below mentioned chart is a small representation of major items which are commonly used by people for more specific list your can go to: //www.incometaxindia.gov.in/Pages/rules/income-tax-rules-1962.aspx
and search :” Rule-New App I”
(The heading in bold are the main block of asset)
| Block of Asset | Rate of Depreciation |
| Building | |
| Building used for residential purpose | 5% |
| Buildings used for other than residential purpose | 10% |
| Temporary structure such as wooden structure | 40% |
| Furniture and fitting | |
| It includes electrical wiring, switches, sockets, other fittings and fans, etc. | 10% |
| Machinery and Plant | |
| Motor cars other than those used in the business of running them on hire | 15% |
| Motor cars used in the business of running them on hire | 30% |
| Aeroplanes | 40% |
| Air pollution control equipment | 40% |
| Water pollution control equipment | 40% |
| Moulds used in rubber and plastic good factories | 40% |
| Computer including computer software | 40% |
| Other machinery not covered above | 15% |
| Books owned by person in profession or person carrying on business of lending books i.e. libraries | 40% |
| Ships | 20% |
| Intangible Asset | |
| Know-how, patent, copyright, trademark, franchise, license or other commercial right of similar nature | 25% |
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