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Depreciation Rate for Furniture, Plant & Machinery

Depreciation can be claimed under the Income Tax Act for the investment made in furniture, plant and machinery by an assessee during the financial year. Plant for the purposes of Income Tax includes ships, vehicles, books, scientific apparatus and surgical equipment used for the purpose of business or profession. Machinery includes all types of mechanical items and contrivances. Machinery also need not be a self-contained unit and could be a part of a bigger machiner or even be one that must be used in conjunction with one or more machines. In this article, we look at the depreciation rate for furniture, plant and machinery under Income Tax.

Depreciation Rate for Furniture

Furniture is an article of convenience or decoration used to furnish a house, apartment, place of business or of accommodation. Under the Income Tax Act, the word furniture also includes fittings. Electrical fittings include wiring, switches, sockets, light fittings, fans, and so on. The depreciation rate for furniture and fitting under the Income Tax Act is 10%.

Depreciation Rate for Plant & Machinery

Plant and machinery includes a wide-range of movable assets owned by a company and includes the following:

1. Air conditioners and electric fans.
2. Mains, service lines and switch gears.
3. Scaffolding and ladders.
4. Electrical transformers.
5. Telephone systems.
6. Safe deposit lockers.
7. Data-processing machines, computers and printers.
8. Tools and instruments.
9. Books containing technical know-how.
10. Bins and shelves in a factory.
11. Cylinders for storing gas.

The depreciation rate for plant and machinery falls under 7 different block rates as under:

15% Depreciation Rate

Motor cars not used in a business of running them on hire and any type of plant and machinery not covered under any of the other blocks is chargeable at 15% depreciation rate.

30% Depreciation Rate

30% depreciation rate is applicable for the following types of plant and machinery:

• Motor buses, motor lorries and motor taxis used in a business of running them on hire.
• Moulds used in rubber and plastic goods factories.

Machinery and plant, used in semi-conductor industry covering all integrated circuits ranging from small scale integration to large scale integration/very large scale integration as also discrete semiconductor devices such as diodes, transistors, thyristors, and so on.) other than those entities to 80% rate of depreciation.

40% Depreciation Rate

40% depreciation rate is applicable for the following types of plant and machinery:

• Aeroplanes and aero-engines.
• Commercial vehicles which are acquired by the assessee on or after 1.10.1998 but before 1.4.1999 and is put to use for any period before 1.4.1999 for the purpose of business or profession.
• Specified life saving medical equipment.
• New commercial vehicles which are acquired on or after 1.4.2001 but before 1.4.2002 and is put to use before 1.4.2002 fo the purposes of business or profession.
• New commercial vehicles which are acquired on or after 1.1.2009 but before 1.10.2009 and is put to use before 1.10.2009 and is put to use before 1.10.2009 for the purpose of business or profession.
• Containers made of glass or plastic used as refills.
• Machinery and plant, used in weaving, processing and garment sector of the textile industry, which is purchased on or after 1.4.2001 but before 1.4.2004 and is put to use before 1.4.2004.

60% Depreciation Rate (40% w.e.f 1.4.2017)

60% depreciation rate is applicable for the following types of plant and machinery. However, the same has been reduced to 40% with effect from 1.4.2017.

• Computers and computer software.
• Books, owned by assesses for carrying on a profession.
• Gas cylinders including valves and regulators, direct fire glass melting furnaces used in Glass manufacturing concerns, plant used in field operations distribution and plant used in field operations, but not including kerbside pumps including underground tanks and fittings used in field operations by mineral oil concerns.

80% Depreciation Rate (40% w.e.f 1.4.2017)

60% depreciation rate is applicable for the following types of plant and machinery. However, the same has been reduced to 40% with effect from 1.4.2017.

• Rollers used in flour mills, rolling mill rolls used in iron and steel industry, rollers used in sugar works, energy-saving devices, renewable energy devices.
• Windmills and any specially designed devices which run on windmills installed on or after 1.4.2014.
• Any special devices including electric generators and pumps running on wind energy installed on or after 1.4.2014.

100% Depreciation Rate (40% w.e.f 1.4.2017)

100% depreciation rate is applicable for the following types of plant and machinery. However, the same has been reduced to 40% with effect from 1.4.2017.

• Machinery and plant acquired and installed on or after 1.9.2002 in a water supply project or a water treatment system and which is put to use for the purpose of business and providing infrastructure facility.
• Wooden parts used in the artificial silk manufacturing industry.
• Cinematograph films and bulbs of studio lights.
• Match factories, wooden match frames.
• Tubs, winding ropes, haulage ropes and sand stowing pipes, and safety lamps used in mines and quarries.
• Saltworks – salt pans, reservoirs and condensers made of earthy, sandy or clayey material or any other similar material.
• Books owned by assesses carrying on profession, being annual publications.
• Books owned by assessees carrying on business in running lending libraries.
• Air pollution control equipment, water pollution control equipment, solid waste control equipment, solid waste recycling and resource recovery systems.