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Depreciation

arpita jain (17 Points)

24 August 2018

what is the depreciation rate on tally software purchase

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11 Replies

Piyush Shirodkar (CA Final Student) (1358 Points)
Replied 24 August 2018

It's 60% as per section 32

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Vaishali Jain (Currently working on improving my skills and capabilities) (2539 Points)
Replied 24 August 2018

Rate of depreciation on computer including computer softwares is 40% from F.Y. 2017-18
hence on tally software rate is 40%

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arpita jain (17 Points)
Replied 24 August 2018

if the tally software is being purchased without the purchase of computer then what is the rate?

CA Bhavik Soni (867 Points)
Replied 24 August 2018

hahahaha. nice question ms arpita. still the rate will be 40% only

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CA P V N Varma (CA ) (609 Points)
Replied 24 August 2018

depreciation rate 40% for computer software even though you purchased without purchase of computer

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Piyush Shirodkar (CA Final Student) (1358 Points)
Replied 24 August 2018

correction to be made it's *40%

arpita jain (17 Points)
Replied 24 August 2018

ok thanks a lot😊

Anurag lohiya (Bara bazar) (262 Points)
Replied 25 August 2018

Software being in relation to the computer would be allowed depreciation of 60% reduced to 40% w.e.f. A.Y. 18-19. ( Court Decision)
Note: It would be pertinent to note that Software cost is fully allowed expesiture u/s 37(1) by virtue of CBDT notification.
Hence, It may be more beneficial to claim it u/s 37 (1) as fully allowable expenditure instead of claiming depreciation on it.
Hope this would help you out.

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arpita jain (17 Points)
Replied 25 August 2018

will software not be counted under intangible assets?

(Guest)

Hi arpita jain, it does not matter what u classify Tally software as (tanglible or intangible) under income tax act, depreciation on software is taken with computer hardware as 40%

In ur financials u can classify it as intangible asset (read indas 38 & 16) as "Tally" is not an integral/ necessary part of your computer hardware (ur computer works fine without tally) but that classification wont affect the depreciation rate under income tax act.