Depreciation
This query is : Resolved
01 October 2010
Sirs,
Todays smartphones have a more powerful processor then any existing palmtop, they can perform almost all applications a laptop can.
Under Sec 32 of the Income tax act 1961, if a palmtop come under the head Computers (since the income tax act does not define the term computers, referred to Information Tech. act 2000), why not classify a smartphone under the head computer's and claim 60% depreciation?
Mark
Todays smartphones have a more powerful processor then any existing palmtop, they can perform almost all applications a laptop can.
Under Sec 32 of the Income tax act 1961, if a palmtop come under the head Computers (since the income tax act does not define the term computers, referred to Information Tech. act 2000), why not classify a smartphone under the head computer's and claim 60% depreciation?
Mark
01 October 2010
The principal function of any instrument called phone is telephony...even if it may have been designed to be used for multiple purposes.
& so it will be classified as a phone only & not computer
& so it will be classified as a phone only & not computer
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01 October 2010
As per the Information Technology act 2000 - "computer" means electronic, magnetic, optical or other high-speed data processing device or system which performs logical, arithmetic and memory functions by manipulations of electronic, magnetic or optical impulses, and includes all input, output, processing, storage, computer software or communication facilities which are connected or relates to the computer in a computer system or computer network;
Well going by the definition, a smart phone falls within the definition. Except for the word ‘phone’ when the device was named.
Practical example:
In a call center employees make calls through computers does that make a computer a phone?
If I install Skype on my Computer and make phone calls does that make my computer a phone?
A smart phone is know for mobile computing and communications today. The Telephonic capability is just a tiny aspect of the device.
The smartphone might not be one's first choice for spreadsheets and documents, but let's face it, everybody has one (in business, anyway, all over the world), and those that have one will buy a new one sometime in the next two years as cellular contracts expire and products and wireless technologies continue their rapid evolution. The level of capability in contemporary smartphones is remarkable and continues to grow.
accordingly smartphones users should be allowed to claim depreciation @ 60%
Well going by the definition, a smart phone falls within the definition. Except for the word ‘phone’ when the device was named.
Practical example:
In a call center employees make calls through computers does that make a computer a phone?
If I install Skype on my Computer and make phone calls does that make my computer a phone?
A smart phone is know for mobile computing and communications today. The Telephonic capability is just a tiny aspect of the device.
The smartphone might not be one's first choice for spreadsheets and documents, but let's face it, everybody has one (in business, anyway, all over the world), and those that have one will buy a new one sometime in the next two years as cellular contracts expire and products and wireless technologies continue their rapid evolution. The level of capability in contemporary smartphones is remarkable and continues to grow.
accordingly smartphones users should be allowed to claim depreciation @ 60%
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02 October 2010
Depreciation is not to be claimed under Information Technology Act. :D
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02 October 2010
No but the Income tax department uses the definition of a computer (as per Information technology act in case laws)
applying this definition, for 'classifying' which block it falls in, for 'depreciation purposes as per income tax act'..
I never stated that Depreciation is to be calmed under information technology act.
1. In call centers Computers are used to make phone calls are they classified as phones?
2. The telephonic capability of a smart phone is a tiny aspect of the device
3. It has an operating system
4. It has a processor the same power of a laptop
5.what is the difference between a smart phone and a laptop, none. now compare it with a traditional mobile or land line, the differences are Humongous.
applying this definition, for 'classifying' which block it falls in, for 'depreciation purposes as per income tax act'..
I never stated that Depreciation is to be calmed under information technology act.
1. In call centers Computers are used to make phone calls are they classified as phones?
2. The telephonic capability of a smart phone is a tiny aspect of the device
3. It has an operating system
4. It has a processor the same power of a laptop
5.what is the difference between a smart phone and a laptop, none. now compare it with a traditional mobile or land line, the differences are Humongous.
02 October 2010
The fact that computers can be used for calling through VOIP or using softwares connected to phone lines doesn't make it primarily a phone.
It is a computer which can be used as phone
& not a phone which can be used as computer
It is a computer which can be used as phone
& not a phone which can be used as computer
02 October 2010
As i said earlier its just that the word phone is used when naming it.
The Smart Phone is not just a phone (Its classified with computers in several countries for taxation purposes).
What am try to say is we need to go beyond just the name and see the technical aspects. I've asked several computer engineer's they've all told me that a smart phone is more of a portable computer rather then a phone.
what if the name was changed from smart phone to smart computer or mini laptop!
The Smart Phone is not just a phone (Its classified with computers in several countries for taxation purposes).
What am try to say is we need to go beyond just the name and see the technical aspects. I've asked several computer engineer's they've all told me that a smart phone is more of a portable computer rather then a phone.
what if the name was changed from smart phone to smart computer or mini laptop!
03 October 2010
smart phone though is more of a computer than simply a phone... but presently... indian income tax law considers phone & computer as separate assets & allows depreciation on phones @ 15% - rate applicable to plant & mach.
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03 October 2010
I agree with you that presently it is classified under plant and machinery.
Do you think, there's a possibility of winning a case for change in classification to computers ?
Do you think, there's a possibility of winning a case for change in classification to computers ?
24 January 2013
Hey guys,
taking this argument a step ahead, now after 2 years since, can ipad or tablet be considered as computer and depreciation be claimed at 60%.
Definition for both - ipad & samsung tab, defines them as tablet computer - Can such argument hold good in court of law.?
PL discuss..
taking this argument a step ahead, now after 2 years since, can ipad or tablet be considered as computer and depreciation be claimed at 60%.
Definition for both - ipad & samsung tab, defines them as tablet computer - Can such argument hold good in court of law.?
PL discuss..
24 January 2013
Vishal, I went ahead and classified smartphones as computers. Till today we havn't received any intimation from the tax authorities. I think you should do the same.
Some Facts. My client an MNC had purchased smartphones worth 40 lac's (approx) for all employees who were in the grade of managers and above.
PS I've spoken to my lawyer friends too, they agree with my views.
Some Facts. My client an MNC had purchased smartphones worth 40 lac's (approx) for all employees who were in the grade of managers and above.
PS I've spoken to my lawyer friends too, they agree with my views.
04 February 2013
Vishal, you can definitely classify iPads and tablet as computers and claim depreciation accordingly.
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