I need clarification regarding the depreciation rate applicable for safe deposit locker under the provisions of income tax act, 1961. Also Classification under which block of asset?
06 July 2024
Under the Income Tax Act, 1961, a safe deposit locker is classified under "Furniture and Fittings" and the applicable depreciation rate is 10% per annum. This classification is based on the general guidelines provided for such assets used in business or profession.
### Depreciation Calculation Example: If the cost of the safe deposit locker is Rs. 50,000, the annual depreciation would be calculated as: Annual Depreciation = Cost of Asset × Depreciation Rate = Rs. 50,000 × 10% = Rs. 5,000
This depreciation amount can be claimed as an expense against income under the head of business or profession, provided the safe deposit locker is used for such purposes. It's essential to maintain proper documentation and comply with all relevant provisions of the Income Tax Act regarding depreciation and asset classification.
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