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Depreciation on Commercial Vehicle

Sanjay (Partner) (80 Points)

10 March 2009

Dear Sir,

As per new notification for for Depreciation on Commercial vehicle 50%. Request to confirm follwing.

1. What will be rate of Deprecation if Buy vehicle in 15.03.2009 in Partnership Firm.

2. Wheather RTO registraion is compulsory required on Firms name.

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4 Replies

Audi murty (Manger) (35 Points)
Replied 10 March 2009

As per Income-Tax (Third Amendment) rules, 2009 - Amendment in new Appendix 1 (Notification no. 10/2009 dated 19-1-2009), New commercial vehicle which is acquired on or after the 1st day of January, 2009 but before the 1st day of April, 2009 and is put to use before the 1st day of April, 2009 for the purposes of business or profession, would be eligible for depreciation at the rate of 50%. This does not apply to second hand vehicle purchased.

“Commercial vehicle” means- heavy goods vehicle, heavy passenger motor vehicle, light motor vehicle, medium goods vehicle and medium passenger motor vehicle but does not include maxi-cab, motor-cab, tractor and road-roller.

Companies and individuals can avail this benefit.

In case of a company or a partnership firm, commercial vehicle should be purchased from its fund and should be registered in the name of its director or partner.

In case of an individual taxpayer, Commercial vehicle means vehicle used for business or profession like Lawyer, doctor, etc do but not salaried employees.

For a vehicle purchased between 1st January 2009 and 31st March 2009, depreciation can be availed for financial year 2009-10 and onwards at same rate of 50%.

The effective rate of depreciation for current FY 2008-09 will be 25% (Half of the prescribed 50%), since the new car will be used for less than 180 days in this year.

The normal 15% depreciation will continue to apply for the vehicles purchased on or after April 1, 2009

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Gaurav vohra (Article) (22 Points)
Replied 09 April 2009

Dear Sir,

I Gaurav Vohra wanted to know that notification on commerical vehicales (i.e.50%) will come again for the period coming in the near future.

hoping that you will reply soon.

Kashyap (Business) (24 Points)
Replied 04 August 2009

Originally posted by : Audi murty
"	As per Income-Tax (Third Amendment) rules, 2009 - Amendment in new Appendix 1 (Notification no. 10/2009 dated 19-1-2009), New commercial vehicle which is acquired on or after the 1st day of January, 2009 but before the 1st day of April, 2009 and is put to use before the 1st day of April, 2009 for the purposes of business or profession, would be eligible for depreciation at the rate of 50%. This does not apply to second hand vehicle purchased. “Commercial vehicle” means- heavy goods vehicle, heavy passenger motor vehicle, light motor vehicle, medium goods vehicle and medium passenger motor vehicle but does not include maxi-cab, motor-cab, tractor and road-roller. Companies and individuals can avail this benefit. In case of a company or a partnership firm, commercial vehicle should be purchased from its fund and should be registered in the name of its director or partner. In case of an individual taxpayer, Commercial vehicle means vehicle used for business or profession like Lawyer, doctor, etc do but not salaried employees. For a vehicle purchased between 1st January 2009 and 31st March 2009, depreciation can be availed for financial year 2009-10 and onwards at same rate of 50%. The effective rate of depreciation for current FY 2008-09 will be 25% (Half of the prescribed 50%), since the new car will be used for less than 180 days in this year. The normal 15% depreciation will continue to apply for the vehicles purchased on or after April 1, 2009	"

That means that if I am buying a new Car with Companies Money and registering it under my name (being a Partner) and put it to use for the business purpose... Than my Company can avail 50% depriciation for the year (if purchased before 30th September) ????