Master TDS & TCS Provisions with Critical Issues. Register Now!

A Higher Rate of Depreciation

CA. A.K. MADHU BALAN (CHARTERED ACCOUNTANT) (24 Points)

04 November 2007

Can an assessee claim a higher rate of depreciaion than that specified in the Income-tax Rules? If he can, in what way he would need to convince the Assessing Officer?

Reply
Follow
Share

11 Replies

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 05 November 2007

Upgrade to CAclubindia Pro. Subscribe Now!

Narayan Roy (Tax Consultant) (35 Points)
Replied 05 November 2007

no. depreciation claimed in excess of the rate provided by the Income Tax Rules would be disallowed at the time of assessment.

Miss Komal Mantri (Chartered Accountant ) (1974 Points)
Replied 05 November 2007

assessee cannot claim depreciation @ higher than specified u/s 32

Nirmal1986 (articles) (149 Points)
Replied 05 November 2007

under any circumstance he cannot claim higher rate of deprecition

Ankit Dangayach (Chartered Accountant) (691 Points)
Replied 05 November 2007

Depreciation can be claimed only as per rates prescribed under Section 32 of IT act.Depreciation at a rate which is higher than that prescribed under sec 32 is not allowed

Upgrade to CAclubindia Pro. Subscribe Now!

Ramakrishna (Financial Executive) (438 Points)
Replied 05 November 2007

Dear Madhu balan, I feel your query is based on the provisions of Section 32(iia) of the Income Tax Act which allows for higher depreciation allowance under certain circumstances for machinery or plant acquired or installed after 01.04.2005 in the business of manufacture of a article or thing. Am i correct? The conditions stipulated are; the said asset not having been previously used within India or outside by another person. The higher depreciation is equivalent to 20% of the actual cost of machinery or plant. Do you find any particular problem in making the claim before the IT dept? Please discuss!

(Guest)

told by everyone that dep claimed higher than Sec 32 is not allowed except additional depriciatoin case for the Mfg. Org. only

(Guest)

I am willing to know about deprecation

ASHISH YADAV (Chartered Accountant) (119 Points)
Replied 08 November 2007

Dear All Higher depriciaton rate is applicable only to the bussiness of motor vehicles on hire basis.accordi to rule 5 of income tax rules,1962,a 30 % of rate can be taken in that case in other casesno rate of depriciation can be higher than the rate prescribed by the income tax aAct

Amarjeet Singh (Chartered Accountant) (152 Points)
Replied 09 November 2007

Excess depretion is dissallowed under the Income Tax Act.However by fulfilling the condition of section 32(iia) u can claim addtional dep on plant & machinery.

Upgrade to CAclubindia Pro. Subscribe Now!

Ramakrishna (Financial Executive) (438 Points)
Replied 09 November 2007

Dear Ashish, Scope of Section 32(iia) of the income Tax Act, not only covers motor cars but covers a wider term plant and machinery as pointed out by Mr.Amarjeet Singh. It is intended for speedy replacement of machinery by the industrial concerns which would very useful in inducting the latest technology in the manufacturing process. It is for the prudent manufacturer assessee to take note of this concession and adequately be benifitted out of this. With regards!