Depreciation Rate For Furniture, Plant And Machinery

Depreciation can be claimed under the Income Tax Act for an assessee’s investment in furniture, plant, and machinery during the fiscal year. Ships, vehicles, books, scientific apparatus, and surgical equipment used for business or profession are all considered a plant for income tax purposes. All mechanical items and contrivances are included in the definition of machinery. Machinery does not have to be a self-contained unit; it could be a component of a larger machine or even one that must be used in conjunction with one or more other machines. In this article, we will look at the income tax depreciation rate for furniture, plant, and machinery.

Conditions For Claiming Depreciation

Depreciation Rate For Furniture, Plant & Machinery

Only when the following conditions are met can you claim a depreciation deduction.

  • The assets should be owned entirely or partially by the assessors.
  • The assets must be used for the taxpayer’s business or profession. If the assets are not used solely for business purposes, but for a variety of other purposes as well, the allowable depreciation would be proportionate to the use of business purposes. Under Section 38 of the Act, the Income Tax Officer also has the right to know the proportionate part of the depreciation.
  • Co-owners may claim depreciation up to the value of the assets owned by each co-owner.
  • Depreciation on the cost of land is not allowable.
  • Depreciation is mandatory beginning in A.Y. It must be allowed or presumed to have been authorized as a deduction, regardless of a claim made by a taxpayer in the profit and loss account.

Furniture Depreciation Rate

Furniture is a piece of convenience or decoration used to adorn a home, apartment, place of business, or lodging. According to the Income Tax Act, the term “furniture” also includes fittings. Wiring, switches, plugs, light fittings, fans, and other electrical fittings are examples of electrical fittings. According to the Income Tax Act, the depreciation rate for furniture and fixtures is 10%.

Plant And Machinery Depreciation Rate

Plant and machinery refer to a company’s moveable assets, which include the following:

  • Electric fans and air conditioners
  • Mains, service lines, and switchgear are all examples of electrical components.
  • Ladders and scaffolding
  • Transformers are electrical devices.
  • Telephone networks.
  • Safe deposit boxes
  • Computers, data processing equipment, and printers
  • Instruments and tools
  • Books giving technical information.
  • In a factory, there are bins and shelves.
  • Cylinders are used to store gas.

The Depreciation Rate for Plant and Machinery is divided into seven different block rates, which are as follows:

Depreciation Rate For Furniture, Plant & Machinery

Depreciation Rate of 15%

Motor vehicles that are not used in the business of renting them out, as well as any type of plant and machinery that is not covered by any of the other blocks, are subject to a 15% depreciation rate.

Rate of Depreciation of 30%

The following types of plant and machinery are subject to a 30% depreciation rate:

  • Motor buses, motor lorries, and motor taxis are all used in the hire business.
  • Moulds are used in the production of rubber and plastic goods.

Other than those entities subject to an 80 percent rate of depreciation, machinery, and plant used in the semiconductor industry cover all integrated circuits ranging from small-scale integration to large-scale integration/very large scale integration, as well as discrete semiconductor devices such as diodes, transistors, thyristors, and so on.

The Depreciation Rate of 40%

The following types of plant and machinery are subject to a 40% depreciation rate:

  • Aeroplane and aero-engines
  • Commercial vehicles acquired by the assessee on or after 1.10.1998 but before 1.4.1999 and used for business or profession for any period before 1.4.1999.
  • Life-saving medical equipment was specified.
  • New commercial vehicles purchased on or after 1.4.2001 but before 1.4.2002 and used for business or profession before 1.4.2002.
  • New commercial vehicles were purchased on or after 1.1.2009 but before 1.10.2009 and used before 1.10.2009 for business or profession.
  • Refill containers made of glass or plastic.
  • Machinery and plants used in the textile industry’s weaving, processing, and garment sectors that are purchased on or after 1.4.2001 but before 1.4.2004 and put to use before 1.4.2004.

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

The following types of plant and machinery are subject to a depreciation rate of 60%. However, as of 1.4.2017, the percentage has been reduced to 40%.

  • Computers and software.
  • Assessors own books to practice their profession.
  • Gas cylinders, containing valves and regulators, and direct fire glass melting furnaces are used in glass production concerns, distribution plants, and distribution plants, but not kerbside pumps, underground tanks, and fittings used in field operations by mineral oil concerns.

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

The following types of plant and machinery are subject to a depreciation rate of 60%. However, as of 1.4.2017, the percentage has been reduced to 40%.

  • Rollers used in flour mills, rolling mill rolls used in the iron and steel industry, sugar mill rollers, energy-saving devices, and renewable energy devices
  • Windmills, as well as any specially designed devices that operate on windmills installed on or after 1.4.2014.
  • Any special devices, including wind-powered generators and pumps, are installed on or after 1.4.2014.

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

The following types of plant and machinery are eligible for a 100% depreciation rate. However, as of 1.4.2017, the percentage has been reduced to 40%.

  • Machinery and plant purchased and installed on or after 1.9.2002 in a water supply project or a water treatment system to do business and provide infrastructure.
  • Wooden components are used in the manufacture of artificial silk.
  • Cinematograph films and studio light bulbs
  • Match factories, as well as wooden match frames
  • In mines and quarries, tubs, winding ropes, haulage ropes, sand stowing pipes, and safety lamps are used.
  • Saltworks — salt pans, reservoirs, and condensers built of earthy, sandy, or clayey material, or any other similar material.
  • Annual publications are books owned by assessors in the course of their profession.
  • Books are owned by assessees who run lending libraries for a living.
  • Air pollution control equipment, water pollution control equipment, solid waste control equipment, solid waste recycling, and resource recovery systems are all examples of pollution control equipment.