ASSET CLASSIFICATION, CAPITALISATION AND DEPRECIATION

This query is : Resolved

RAJANEESH V R (Querist)
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09 April 2022 Sir,
Under which head following items are classified(If possible, inform Sub heads and depreciation rate applicable as per Income Tax Act for assets) :
1. CCTV
2. AC
3. CEILING WORK
4. CASH COUNTING MACHINE
5. FREEZER
6. GENERATOR
7. STAMP PAPER VALUE FOR DEED AND LEASE AGREEMENT
8. INTERLOCK
9. INVERTER
10.LOGO
11. FSSAI,DRUG,LEGAL METROLOGY ETC LICENSE FEE
12.PLUMBING
13. RACK
14. TILES
15. FABRICATION

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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06 July 2024 Here's a breakdown of how each item is generally classified for accounting and depreciation purposes, along with the depreciation rates applicable under the Income Tax Act for assets used in business or profession:

1. **CCTV**
- **Classification**: Plant & Machinery
- **Depreciation Rate**: 15%

2. **AC (Air Conditioner)**
- **Classification**: Plant & Machinery
- **Depreciation Rate**: 15%

3. **CEILING WORK**
- **Classification**: Building (if permanent); Repairs & Maintenance (if not permanent)

4. **CASH COUNTING MACHINE**
- **Classification**: Plant & Machinery
- **Depreciation Rate**: 15%

5. **FREEZER**
- **Classification**: Plant & Machinery
- **Depreciation Rate**: 15%

6. **GENERATOR**
- **Classification**: Plant & Machinery
- **Depreciation Rate**: 15%

7. **STAMP PAPER VALUE FOR DEED AND LEASE AGREEMENT**
- **Classification**: Intangible Asset (Legal and Professional Fees)
- **Depreciation Rate**: Not applicable; generally amortized over the period of the agreement

8. **INTERLOCK**
- **Classification**: Building (if permanent); Repairs & Maintenance (if not permanent)

9. **INVERTER**
- **Classification**: Plant & Machinery
- **Depreciation Rate**: 15%

10. **LOGO**
- **Classification**: Intangible Asset (Brand)
- **Depreciation Rate**: Not applicable; amortized over the useful life

11. **FSSAI, DRUG, LEGAL METROLOGY ETC LICENSE FEE**
- **Classification**: Intangible Asset (Licenses)
- **Depreciation Rate**: Not applicable; amortized over the period of the license

12. **PLUMBING**
- **Classification**: Building (if part of the structure); Repairs & Maintenance (if not part of the structure)

13. **RACK**
- **Classification**: Plant & Machinery
- **Depreciation Rate**: 15%

14. **TILES**
- **Classification**: Building (if part of the structure); Repairs & Maintenance (if not part of the structure)

15. **FABRICATION**
- **Classification**: Building (if part of the structure); Repairs & Maintenance (if not part of the structure)

Please note:
- **Depreciation Rates**: The rates provided (15% for most items under Plant & Machinery) are indicative and based on general practices. Actual rates can vary based on specific circumstances and changes in tax laws. It's advisable to consult with a tax advisor or refer to the latest Income Tax Act provisions for accurate rates applicable to your business.

- **Classification**: Items like licenses, logos, and stamp paper values are typically considered intangible assets or expenses, depending on the nature of their use and the accounting treatment followed by the entity.

For precise classification and depreciation treatment, especially considering any recent updates or specific circumstances of your business, professional advice from a tax consultant or accountant familiar with your jurisdiction's tax laws is recommended.