28-09-2010 Rates of depreciation under the Com…

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by admin

Rates of depreciation under the Companies Act as mentioned in Schedule

XIV
August 5, 2009 in Company Law b y admin

Section 205 of the Companies Act, 1956, prescribes the

methods of charging depreciation. The relevant extracts
thereof are as follows:

“(2) … depreciation shall be provided either-

(a) to the extent specified in section 350; or

(b) in respect of each item of depreciable asset, for

such an amount as is arrived at by dividing ninety five
percent of the original cost thereof to the company by
the specified period in respect of such asset; or

(c) on any other basis approved b y the Central

Government which has
the effect of writing off by way of depreciation ninety five
per cent of the original cost to the company of each
such depreciable asset on the expiry of the specified
period; or

(d) as regards any other depreciable, asset for which no rate of depreciation has been laid down by this
Act or rules made thereunder, on such basis as may be approved by the Central Government by the
general order published in the Official Gazette or by any special order in any particular case:

Provided that where depreciation is provided for in the, manner laid down in clause (b) or clause (c), then,
in the event of the depreciable asset being sold, discarded, demolished or destroyed the written down
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28-09-2010 Rates of depreciation under the Com…
value thereof at the end of the financial year in which the asset is sold, discarded, demolished or
destroyed, shall be written off in accordance with the proviso to section 350.

………..

(5) ‘Specified period’ in respect of any depreciable asset shall mean the number of years at the end of
which at least ninety-five per cent of the original cost of the asset to the company will have been provided
for by way of depreciation if depreciation were to be calculated in accordance with the provisions of section
350.

We are producing below the Rates of depreciation under the Companies Act as mentioned in Schedule
XIV

schedule xiv

[See sections 205 and 350]

Rates of depreciation

Nature of assets Single Shift Doub le Shift Triple Shift

WDV SLM WDV SLM WDV SLM
1 2 3 4 5 6 7
I. (a) BUILDINGS (other than factory buildings) [NESD] 5% 1.63% ….. ….. ….. …..
(b ) FACTORY BUILDINGS 10%. 3.34% ….. ….. ….. …..
PURELY TEMPORARY ERECTIONS such as
(c) 100% 100% ….. ….. ….. …..
wooden structures
II. PLANT AND MACHINERY
1 [(i) Generalrate applicable to,—
(a) plant and machinery (not being a ship) other than
continuous process plant for which no special rate has 13.91% 4.75% 20.87% 7.42% 27.82% 10.34%
been prescribed under (ii) below
(b ) continuous process plant, 2[* * *] for which no
special rate has been prescribed under (ii) below 15.33% 5.28% ….. ….. ….. …..]
[NESD]
(ii) Special rates
A.1.Cinematograph films – Machinery used in the
production and exhibition of cinematograph films
[NESD]
(a) Recording equipment, reproducing equipment,
20% 7.07% ….. ….. ….. …..
developing machines, printing machines, editing
machines, synchronisers and studio lights except bulbs
(b ) Projecting equipment of film exhibiting concerns
2. Cycles [NESD]
3
[3. Electrical machinery, X-ray and electro-therapeutic
apparatus and accessories thereto, medical, diagnostic
20% 7.07% ….. ….. ….. …..
equipments, namely, cat-scan, ultrasound machines,
ECG monitors, etc. [NESD]
4. Juice boiling pans (karhais) [NESD] 20% 7.07% ….. ….. ….. …..
5. Motor-cars, motor-cycles, scooters and other mopeds
25.89% 9.5% ….. ….. ….. …..
[NESD]
6. Electrically operated vehicles including battery
20% 7.07% ….. ….. ….. …..
powered or fuel cell powered vehicles [NESD]
7. Sugarcane crushers (indigenous kolhus and belans)
20% 7.07% ….. ….. ….. …..
[NESD]
8. Glass manufacturing concerns except direct fire
glass melting furnaces – Recuperative and 20% 7.07% 30% 11.31% 40% 16.21%
regenerative glass melting furnaces
9. Machinery used in the manufacture of electronic
15.62% 5.38% 23.42% 8.46% 31.23% 11.87%]
goods and components
B. 1. 4 [Aeroplanes, aero engines, simulators, visual 16.2% 5.6%]
system and quick engine change equipment [NESD]
2. Concrete pipes manufacture—Moulds [NESD]
3. Drum containers manufacture—Moulds [NESD]
4. Earth-moving machinery employed in heavy
construction works, such as dams, tunnels, canals, etc.
[NESD]
5. Glass manufacturing concerns except direct fire
glass melting furnaces—Moulds [NESD]
6. Moulds in iron foundries [NESD]

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7. Mineral oil concerns—Field operations (above
ground)—Portable boilers, drilling tools, well-head
30% 11.31% ….. ….. ….. …..
tanks, rigs, etc. [NESD]
8. Mines and quarries—Portable underground
machinery and earth-moving machinery used in open
cast mining [NESD]
9. Motor buses and motor lorries other than those used
in a business of running them on hire [NESD]
9A. Motor tractors, harvesting combines [NESD]
10. Patterns, dies and templates [NESD]
11. Ropeway structures—Ropeways, ropes and
trestle sheaves and connected parts [NESD]
12. Shoe and other leather goods fabrics—Wooden
30% 11.31% 45% 18.96% 60% 29.05%
lasts used in the manufacture of shoes
C. 1. 5 [** ** **]
2. Motor buses, motor lorries and motor taxis used in a
business of running them on hire [NESD] 40% 16.21% ….. ….. ….. …..
3. Rubber and plastic goods factories—Moulds [NESD]
4. Data processing machines including computers
[NESD]
40% 16.21% ….. ….. ….. …..
5. Gas cylinders including valves and regulators
[NESD]
D. 1. Artificial silk manufacturing machinery with wooden
parts
2. Cinematograph films—Bulbs of studio lights
3. Flour mills—Rollers 100% 100% ….. ….. ….. …..
4. Glass manufacturing concerns
—Direct fire glass melting
furnaces
4A. Flot Glass Melting Furnaces (NESD) 27% 10% ….. ….. ….. …..
5. Iron and Steel industries—Rolling mill rolls
6. Match factories—Wooden match frames
7. Mineral oil concerns—(a) Plant used in field
operations (below ground)—Distribution – returnable
packages; (b ) Plant used in field operations (below
ground) but not including assets used in field
operations (distribution)—Kerbside pumps including
underground tanks and fittings
100% 100% ….. ….. ….. …..
8. Mines and quarries—
(a) Tubs, winding ropes, haulage ropes and sand
stowing pipes
(b ) Safety lamps
9. Salt works—Salt pans, reservoirs and condensers,
etc., made of earthy, sandy or clay material or any other
similar material
10. Sugar works—Rollers
III. FURNITURE AND FITTINGS
6 [1. General Rates [NESD] 18.1% 6.33% ….. ….. ….. …..
2. Rate for furniture and fittings used in hotels,
restaurants and boarding houses; schools, colleges
and other education al institutions, libraries; welfare
centres; meeting halls, cinema houses; theatres and
circuses; and for furniture and fittings let out on hire for
use on the occasion of marriages and similar functions
[NESD]
IV. SHIPS
1. Ocean-going ships— 25.88% 9.5% ….. ….. ….. …..
(i) Fishing vessels with wooden hull [NESD]
(ii) Dredgers, tugs, barges, survey launches and other
similar ships used mainly for dredging purposes 27.05% 10% ….. ….. ….. …..
[NESD]
(iii) Other ships [NESD] 19.8% 7% ….. ….. ….. …..
2. Vessels ordinarily operating on inland waters— 14.6% 5% ….. ….. ….. …..
(i) Speed boats [NESD]
(ii) Other vessels [NESD]
WDV means written down value 20% 7.07% ….. ….. ….. …..

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28-09-2010 Rates of depreciation under the Com…
SLM means straight line method 10% 3.34% ….. ….. ….. …..

NOTES

1. “Buildings” include roads, bridges, culverts, wells and tube-wells.

2. “Factory buildings” does not include offices, godowns, officers’ and employees’ quarters, roads,
bridges, culverts, wells and tube-wells.

3. “Speed boat” means a motor boat driven by a high speed internal combustion engine capable of
propelling the boat at a speed exceeding 24 kilometres per hour in still water and so designed that when
running at a speed it will plane, i.e., its bow will rise from the water.

4. Where, during any financial year, any addition has been made to any asset, or where any asset has
been sold, discarded, demolished or destroyed, the depreciation on such assets shall be calculated on a
pro rata basis from the date of such addition or, as the case may be, up to the date on which such asset
has been sold, discarded, demolished or destroyed.

5. The following information should also be disclosed in the accounts:

(i) depreciation methods used; and

(ii) depreciation rates or the useful lives of the assets, if they are different from the principal rates
specified in the Schedule.

6. The calculations of the extra depreciation for double shift working and for triple shift working shall be
made separately in the proportion while the number of days for which the concern worked double shift or
triple shift, as the case may be, bears to the normal number of working days during the year. For this
purpose, the normal number of working days during the year shall be deemed to be—

(a) in the case of a seasonal factory or concern, the number of days on which the factory or concern
actually worked during the year or 180 days, whichever is greater;

(b ) in any other case, the number of days on which the factory or concern actually worked during the year
or 240 days, whichever is greater.

The extra shift depreciation shall not be charged in respect of any item of machinery or plant which has
been specifically, excepted by inscription of the letters “NESD” (meaning “no extra shift depreciation”)
against it in sub-items above and also in respect of the following items of machinery and plant to which
the general rate of depreciation of 7 [13.91] per cent applies—

(1) Accounting machines.

(2) Air-conditioning machinery including room air-conditioners.

(3) Building contractor’s machinery.

(4) Calculating machines.

(5) Electrical machinery—switchgear and instruments, transformers and other stationary plant and wiring
and fitting of electric light and fan installations.

(6) Hydraulic works, pipelines and sluices.

(7) Locomotives, rolling stocks, tramways and railways used by concerns, excluding railway concerns.

(8) Mineral oil concerns—field operations:

(a) 8 [* * *]

(b ) Prime movers

(c) 8 [* * *]

(d) Storage tanks (above ground)

(e) Pipelines (above ground)

(f) Jetties and dry docks

(9) Mineral oil concerns—field operations (distribution)—kerbside pumps, including underground tanks
and fittings.

(10) Mineral oil concerns—refineries :

(a) 9 [* * *]

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(b ) Prime movers

(c) 9 [* * *]

10 [(d) LPG Plant]

(11) Mines and quarries :

(a) Surface and underground machinery (other than electrical machinery and portable underground
machinery)

(b ) Head-gears

(c) Rails

(d) 9 [* * *]

(e) Shafts and inclines

(f) Tramways on the surface

(12) Neo-post franking machines.

(13) Office machinery.

(14) Overhead cables and wires.

(15) Railway sidings.

(16) Refrigeration plant container, etc. (other than racks).

(17) Ropeway structures :

(a) Trestle and station steel work.

(b ) Driving and tension gearing.

(18) Salt works—Reservoirs, condensers, salt pans, delivery channels and piers if constructed of
masonry, concrete, cement, asphalt or similar materials; barges and floating plant; piers, quays and
jetties; and pipelines for conveying brine if constructed of masonry, concrete, cement, asphalt or similar
materials.

(19) Surgical instruments.

(20) Tramways electric and tramways run by internal combustion engines—permanent way: cars—car
trucks, car bodies, electrical equipment and motors; tram cars including engines and gears.

(21) Typewriters.

(22) Weighing machines.

(23) Wireless apparatus and gear, wireless appliances and accessories.]

(24) 11 [* * *]

12[7. ‘Continuous process plant’ means a plant which is required and designed to operate 24 hours a
day.

8. Notwithstanding anything mentioned in this Schedule, depreciation on assets, whose actual cost does
not exceed five thousand rupees, shall be provided at the rate of hundred per cent:]

13 [Providedthat where the aggregate actual cost of individual items of plant and machinery costing Rs.
5,000 or less constitutes more than 10 per cent of the total actual cost of plant and machinery, rates of
depreciation applicable to such items shall be the rates as specified in Item II of the Schedule.]

Tags: central government, Companies Act, depreciable asset, Depreciation rate under the companies act, depreciation
rates, double shift, ninety five, original cost, rate of depreciation, Schedule XIV
29 Comments »

29 Responses to “Rates of depreciation under the Companies Act as mentioned in Schedule

XIV”

1. vib huj gupta says:

September 1, 2009 at 5:54 am

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28-09-2010 Rates of depreciation under the Com…
Respected Sir,i want to know that if any company purchases any assets costing Rs. lessthan 5000 then 100%
depreciation will be chareged even allready company is having such assets account in thier books

2. pankaj k says:
September 4, 2009 at 7:46 pm

fantastic article.
Got my exams tomorrow. Definitely helps.

3. E.Chiranjeevi says:
November 29, 2009 at 8:52 am

Please Send me Sep’08 Depreciation Rates

4. VL Ganapathi says:
December 28, 2009 at 6:14 am

Please let me know depreciation applicable to SERVOMOTORS connected in Chip Mounter Machine

5. Gupta says:
February 5, 2010 at 5:34 am

Dear sir,

Is it possible to claim the depreciation at the rates below specified in the SCH XIV of the companies act. If so,
what are the situation, under which we can claim like that?

6. ankita moran says:

February 27, 2010 at 5:51 am

Sir,
Please let me know if it is not mandatory for a proprietorship concern to provide depreciation to its machineries
that are used for business purpose. If it is not mandatory, please tell me which part of which Act mentions about
it.

7. tamanna says:
April 10, 2010 at 3:35 pm

sir
can a c.a firm claim depreciation on any software purchased by them eg software for e-filing tds ,it returns if so at
what rate??

8. MAYUR says:
April 14, 2010 at 1:56 pm

WHT R D RATES OF DEPRECIATION ON COMPUTER RELATED COMPONENTS LIKE PRINTER

9. admin says:
April 14, 2010 at 3:26 pm

In My Opinion same rate as applicable to computers.

10. Vijay Dashore says:

April 14, 2010 at 4:25 pm

can a shift be long for more than 8 hrs.

my plant is running for 10 hrs can i claim depreciation on single shift basis.?

11. suprab ha says:

May 14, 2010 at 7:51 pm

What is the rate of depreciation for kitchen appliances and other kitchen items?

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28-09-2010 Rates of depreciation under the Com…

12. Bachan says:

May 15, 2010 at 2:46 pm

Any Rate of Depreciation Change in companies Act

13. nagesh kadu says:

May 18, 2010 at 10:16 am

Sir,
Pls. let me know whether same rate are applicable for FY 2009-10.

14. Yusufi A. Kapasi says:

May 19, 2010 at 2:32 pm

As per IAS -16 it is required to be reported whether depreciable amount is allocated systematiclly over its usefule
life.

If the depreciation is provided as per companies Act,1956, Whether it can be said that the depreciation amount
has been properly allocated to useful life of asset ?

15. admin says:

May 19, 2010 at 3:10 pm

Hi
Depreciation rates as per companies Act are only indicative and you cant charge depreciation lesser then the
rates specified in the schedule but there is no restriction on charging depreciation at higher rates.

So if useful life of the Assets is lesser then what specified in the schedule then depreciation should be charged at
higher rates.

16. N.JOSHI says:

June 27, 2010 at 4:24 pm

Dear Sir,

I want to know the depreciation rates (Fin.Yr: 2010-2011: Ass.Yr. 2011-2012) as per Company’s Act & Income Tax
Act.

1) Plant & Machiney

2) Land & Building
3) Computer
4) Scooter
5) Computer
6) Telephone Equipment
7) Lap top
EPBX SYSTEMS.

It would be very kind of you if you could help me in this matter.

Thanx & Regds,

N.Joshi

17. ankit says:

June 30, 2010 at 10:10 am

A company charges depreciation on mobile sets purchased for office use. Will d depreciation be charged on
additional battery purchased or on installation of any software on mobile.? if yes How.??

18. Srinivas says:

July 13, 2010 at 3:01 pm

Hello,
I would like to know the rate of depreciation both under the Companies Act and Income-Tax Act, for steel
structures installed on an entertainment house on their premises.

Thanks

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28-09-2010 Rates of depreciation under the Com…
Srinivas

19. v.srinivas says:

July 17, 2010 at 5:41 pm

dear sir

i don’t know how to calculate the depreciation under companies act and income tax act and also give me
information depreciation percentage both act

20. Ashpak Ali says:

July 19, 2010 at 12:01 pm

Q.1 what is deffered tax assets & deffered tax liability?

Q 2. where will be show diffrenece between profit according to companies act and income tax act?

Q 3. what is ROC Return?

Q 4. Why fill up the ROC return?

21. Devang Patel says:

July 26, 2010 at 1:24 pm

What will be the rate of depreciation on ‘leasehold improvements’ if the lease period is 3 years and there are
100% chances of renewal of lease agreement.

22. milan patel says:

July 26, 2010 at 6:04 pm

i want to deprisation rate as per company act

in excel formate

23. CA Anupam Goel says:

August 14, 2010 at 12:44 pm

To Mr. Vibhuj Gupta,

No, that asset will be added to the block to which it belongs and then dep willbe charged according to the rate of
dep of that block.

24. aayush says:

August 19, 2010 at 11:20 am

is there depreciation as per companies act applicable on days basis.what is the procedures of depreciation of
any addition or disposal made

25. Yaman says:

September 10, 2010 at 5:53 pm

plz tell me at what rate, should i provide depreciation on the website i have purchased…

26. admin says:

September 11, 2010 at 5:49 am

As per the rate applicable to Computers.

27. Kishan Bidasaria says:

September 24, 2010 at 1:14 pm

Dear Sir,

I want to know the depreciation rates (Fin.Yr: 2009-2010: Ass.Yr. 2010-2011) as per Company’s Act & Income Tax
Act.

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28-09-2010 Rates of depreciation under the Com…
1) Plant & Machiney
2) Land & Building
3) Computer
4) CAR & Scooter
6) Telephone & Mobile

Kishan Bidasaria
kishan.bidasaria@yahoo.com

28. T PATTABHI RAMARAO says:

September 25, 2010 at 10:26 pm

Please send me Depriciation table as per Income tax act

29. T PATTABHI RAMARAO says:

September 25, 2010 at 10:30 pm

Dear Sir,

Please mention the following:

Rate of Depriciation on Rolling mill rolls as per IT ACT

PATTABHI
pattabhi_t3@yahoo.co.in

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