Under the Income Tax Act, depreciation is allowed as a deductible expense for assets used in business or profession, subject to certain conditions and limitations. The amount of depreciation that can be claimed depends on the asset's useful life, which is determined by the Income Tax Rules.
The Income Tax Act allows for the depreciation of various types of assets such as buildings, machinery, furniture, vehicles, computers, patents, etc. The rates of depreciation vary depending on the type of asset, its useful life, and the method of depreciation used (straight-line method, written-down value method, etc.).
SL No.
Block of assets
Rate of Depreciation (%)
Buildings which are used mainly for residential purposes except hotels and boarding houses
Buildings other than those used mainly for residential purposes and not covered by sub-items
Buildings acquired after September 1, 2002, for installing machinery and plant forming part of water supply or treatment systems, and used for providing infrastructure facilities under section 80-IA
Purely temporary erections such as wooden structures
SL No.
Block of assets
Rate of Depreciation (%)
Furniture and fittings including electrical fittings
SL No.
Block of assets
Rate of Depreciation (%)
Machinery and plant other than those covered by sub-items (2), (3) and (8) below
Motor cars, excluding those used in a business of running them on hire, procured or put to use on or after April 1, 1990
Motor cars (excluding those used for hire) acquired between August 23, 2019, and April 1, 2020, and put to use before April 1, 2020
Motor buses, motor lorries and motor taxis used in a business of running them on hire other than those covered under entry (b)
Motor buses, motor lorries and motor taxis used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020.
A commercial vehicle acquired by an assessee between October 1, 1998, and April 1, 1999, and put to use for any period before April 1, 1999, for business or professional purposes in accordance with the third proviso to clause (ii) of sub-section (1) of section 32
A new commercial vehicle acquired between October 1, 1998, and April 1, 1999, in replacement of a condemned vehicle over 15 years of age and put to use for any period before April 1, 1999, for business or professional purposes in accordance with the third proviso to clause (ii) of sub-section (1) of section 32
A new commercial vehicle acquired between April 1, 1999, and April 1, 2000, in replacement of a condemned vehicle over 15 years of age and put to use before April 1, 2000, for business or professional purposes in accordance with the second proviso to clause (ii) of sub-section (1) of section 32
A new commercial vehicle acquired between April 1, 2001, and April 1, 2002, and put to use before April 1, 2002, for business or professional purposes or A new commercial vehicle acquired between Jan 1, 2009, and Oct 1, 2009, and put to use before Oct 1, 2009, for business or professional purposes
Moulds used in rubber and plastic goods factories
Air pollution control equipment such as electrostatic precipitation systems, felt-filter systems, dust collector systems, scrubber systems, and ash handling systems
Water pollution control equipment includes Mechanical screen systems, Aerated detritus chambers (including air compressor), Mechanically skimmed oil and grease removal systems, Chemical feed systems and flash mixing equipment, Mechanical flocculators and mechanical reactors, Diffused air/mechanically aerated activated sludge systems, Aerated lagoon systems, Biofilters, Methane-recovery anaerobic digester systems, Air floatation systems, Air/steam stripping systems, Urea Hydrolysis systems, Marine outfall systems, Centrifuge for dewatering sludge, Rotating biological contractor or bio-disc, Ion exchange resin column and Activated carbon column
Equipment for controlling solid waste, such as systems for recovering caustic, lime, chrome, mineral, or cryolite, and systems for recycling and recovering resources from solid waste.
Machinery and plants used in the semi-conductor industry for producing integrated circuits (ICs) ranging from SSI to LSI/VLSI and discrete semi-conductor devices such as diodes, transistors, thyristors, triacs, etc., except those covered by entries (viii), (ix) and (x) of this sub-item and sub-item (8) below
Life saving medical equipment, inclides D.C. Defibrillators for internal use and pace makers,Haemodialysors, Heart lung machine, Cobalt Therapy Unit, Colour Doppler, SPECT Gamma Camera, Vascular Angiography System including Digital subtraction Angiography, Ventilator used with anaesthesia apparatus, Magnetic Resonance Imaging System, Surgical Laser, Ventilators other than those used with anaesthesia, Gamma knife, Bone Marrow Transplant Equipment including silastic long standing intravenous catheters for chemotherapy, Fibreoptic endoscopes including Paediatric resectoscope/audit resectoscope, Peritoneoscopes, Arthoscope, Microlaryngoscope, Fibreoptic Flexible Nasal Pharyngo Bronchoscope, Fibreoptic Flexible Laryngo Bronchoscope, Video Laryngo Bronchoscope and Video Oesophago Gastroscope, Stroboscope, Fibreoptic Flexible Oesophago Gastroscopeand Laparoscope (single incision)
Containers made of glass or plastic used as re-fills
Computers including computer software
Machinery and plant used in the weaving, processing, and garment sector of the textile industry purchased under the Technology Upgradation Fund Scheme (TUFS) between April 2001 and April 2004 and put to use before April 2004
Machinery and plant acquired on or after 1st September 2002 for water supply projects or water treatment systems used to provide infrastructure facilities for business purposes under section 80-IA(4)(i)
Wooden parts used in artificial silk manufacturing machinery
Cinematograph films - bulbs of studio lights
Match factories - Wooden match frames
Mines and quarries includes Tubs, winding ropes, haulage ropes, sand stowing pipes, Safety lamps
Salt works - Salt pans, reservoirs and condensers, etc., made of earthy, sandy or clayey material or any other similar material
Flour mills - Rollers
Iron and steel industry - Rolling mill rolls
Sugar works - Rollers
Energy saving devices, includes— A. Specialised boilers and furnaces: (a) Ignifluid/fluidized bed boilers (b) Flameless furnaces and continuous pusher type furnaces (c) Fluidized bed type heat treatment furnaces (d) High efficiency boilers (thermal efficiency higher than 75 per cent in case of coal fired and 80 per cent in case of oil/gas fired boilers)
B. Instrumentation and monitoring system for monitoring energy flows: (a) Automatic electrical load monitoring systems (b) Digital heat loss meters (c) Micro-processor based control systems (d) Infra-red thermography (e) Meters for measuring heat losses, furnace oil flow, steam flow, electric energy and power factor meters (f) Maximum demand indicator and clamp on power meters (g) Exhaust gases analyser (h) Fuel oil pump test bench
C. Waste heat recovery equipment: (a) Economisers and feed water heaters (b) Recuperators and air pre-heaters (c) Heat pumps (d) Thermal energy wheel for high and low temperature waste heat recovery
D. Co-generation systems: (a) Back pressure pass out, controlled extraction, extraction-cum-condensing turbines for co-generation along with pressure boilers (b) Vapour absorption refrigeration systems (c) Organic rankine cycle power systems (d) Low inlet pressure small steam turbines
E. Electrical equipment: (a) Shunt capacitors and synchronous condenser systems (b) Automatic power cut off devices (relays) mounted on individual motors (c) Automatic voltage controller (d) Power factor controller for AC motors (e) Solid state devices for controlling motor speeds (f) Thermally energy-efficient stenters (which require 800 or less kilocalories of heat to evaporate one kilogram of water) (g) Series compensation equipment (h) Flexible AC Transmission (FACT) devices - Thyristor controlled series compensation equipment (i) Time of Day (ToD) energy meters (j) Equipment to establish transmission highways for National Power Grid to facilitate transfer of surplus power of one region to the deficient region (k) Remote terminal units/intelligent electronic devices, computer hardware/software, router/bridges, other required equipment and associated communication systems for supervisory control and data acquisition systems, energy management systems and distribution management systems for power transmission systems (l) Special energy meters for Availability Based Tariff (ABT)
F. Burners: (a) 0 to 10 per cent excess air burners (b) Emulsion burners (c) Burners using air with high pre-heat temperature (above 300°C)
Other equipment: (a) Wet air oxidation equipment for recovery of chemicals and heat (b) Mechanical vapour recompressors (c) Thin film evaporators (d) Automatic micro-processor based load demand controllers (e) Coal based producer gas plants (f) Fluid drives and fluid couplings (g) Turbo charges/super-charges (h) Sealed radiation sources for radiation processing plants
Gas cylinders including valves and regulators
Glass manufacturing concerns - Direct fire glass melting furnaces
Mineral oil concerns: (a) Plant used in field operations (above ground) distribution - Returnable packages (b) Plant used in field operations (below ground), but not including kerbside pumps including underground tanks and fittings used in field operations (distribution) by mineral oil concerns
(c) Oil wells not covered in clauses (a) and (b) (with effect from the assessment year 2016-17)
Renewable energy devices include a wide range of technologies such as solar collectors (flat plate, concentrating, pipe type), solar cookers, solar water heaters, air/gas/fluid heating systems, solar crop driers, solar refrigeration and air-conditioning systems, solar power generating systems, solar pumps, solar-photovoltaic modules and panels, windmills, biogas plants and engines, electric vehicles, waste conversion devices, ocean waste and thermal energy utilization equipment, and machinery for manufacturing these devices
Books owned by assessees carrying on a profession— (a) Books, being annual publications
(b) Books, other than those covered by entry (a) above
Books owned by assessees carrying on business in running lending libraries
SL No.
Block of assets
Rate of Depreciation (%)
(1) Ocean-going ships including dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes and fishing vessels with wooden hull (2) Vessels ordinarily operating on inland waters, not covered by sub-item (3) below (3) Vessels ordinarily operating on inland waters being speed boats
SL No.
Block of assets
Rate of Depreciation (%)
Franchise, trademark, patents, license, copyright, know-how or other commercial or business rights of similar nature
Notes:
1. "Buildings" include roads, bridges, culverts, wells and tubewells.
2. A building shall be deemed to be a building used mainly for residential purposes, if the built-up floor area thereof used for residential purposes is not less than sixty-six and two-third per cent of its total built-up floor area and shall include any such building in the factory premises.
3. In respect of any structure or work by way of renovation or improvement in or in relation to a building referred to in Explanation 1 of clause (ii) of sub-section (1) of section 32, the percentage to be applied will be the percentage specified against sub-item (1) or (2) of item I as may be appropriate to the class of building in or in relation to which the renovation or improvement is effected. Where the structure is constructed or the work is done by way of extension of any such building, the percentage to be applied would be such percentage as would be appropriate, as if the structure or work constituted a separate building.
4. Water treatment system includes system for desalination, demineralisation and purification of water.
5. "Electrical fittings" include electrical wiring, switches, sockets, other fittings and fans, etc.
5A. Rate of depreciation shall be 40% if conditions of Rule 5(2) are satisfied.
5B. Applicable from the Assessment year 2004-05.
6. "Commercial vehicle" means "heavy goods vehicle", "heavy passenger motor vehicle", "light motor vehicle", "medium goods vehicle" and "medium passenger motor vehicle" but does not include "maxi-cab", "motor-cab", "tractor" and "road-roller". The expressions "heavy goods vehicle", "heavy passenger motor vehicle", "light motor vehicle", "medium goods vehicle", "medium passenger motor vehicle", "maxi-cab", "motor-cab", "tractor" and "road-roller" shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988).
7. "Computer software" means any computer programme recorded on any disc, tape, perforated media or other information storage device.
8. "TUFS" means Technology Upgradation Fund Scheme announced by the Government of India in the form of a Resolution of the Ministry of Textiles vide No. 28/1/99-CTI of 31-3-1999.
9. Machinery and plant includes pipes needed for delivery from the source of supply of raw water to the plant and from the plant to the storage facility.
10. "Speed boat" means a motor boat driven by a high speed internal combustion engine capable of propelling the boat at a speed exceeding 24 kilometers 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.
