DEPRECIATION
RATES FOR THE FINANCIAL YEAR 2002-03 AMENDED
The Central Government
have issued a notification on 27th September, 2002
substituting Appendix-I to the Income-tax Rules, 1962 relating
to rates at which depreciation is admissible. As per the substituted
Appendix, a rate of 80% has been prescribed in case of certain
air pollution control equipment, water pollution control equipment,
solid waste control equipment, energy saving devices, renewable
energy devices, etc. which are at present eligible for 100% depreciation.
Books other than
annual publications used by assessees carrying on profession shall
now depreciate at the rate of 60% as against the present rate
of 100% whereas books owned by assessees carrying on the business
of running lending libraries would continue to depreciate at 100%.
Buildings have
been classified as buildings mainly used for residential purposes
excluding hotels and boarding houses (rate 5%) and all other buildings
(10%) as against the present classification of buildings used
for residential and mainly for commercial purposes. The existing
rate of 20% available to buildings used as hotels and buildings
with dwelling units each with a plinth area not exceeding 80 square
meters will no longer be available.
A single rate
of 15% for depreciation of furniture and fittings as against the
present rates of 10% and 15%. For computers including computer
software, a rate of 60% depreciation has been prescribed.
Another category
under the heading "Buildings" has been added so as to
include therein buildings which are acquired by the assessee on
or after the 1st September, 2002 and in which machinery
and plant forming part of water supply project or water treatment
system are installed and which is put to use for the purpose of
business of providing infrastructure facility as envisaged in
the provisions of section 80-IA(4)(i). These assets shall depreciate
at the rate of 100%. Further, a rate of 100% depreciation has
been prescribed for machinery and plant acquired and installed
on or after 1st 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 as envisaged
in the provisions of section 80-IA(4)(i). The concessions have
been provided with a view to encourage private initiatives for
setting up of plants for desalinization/demineralization and purification
of water and supply of purified water to members of public.
A copy of the
notification as well as the substituted Appendix-I is available
on the web-site of the Ministry of Finance (finmin.nic.in) located
under CBDT in the Department of Revenue.
