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Depreciation on windmill.

Deepak Kumar (Article) (32 Points)

31 August 2010

I need to know the rate of depreciation on Windmill. Whether different component of a windmill being charged at same depreciation rate as windmill or at different rate? Can I take additional depreciation on newly purchased windmill?

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7 Replies

Rahul Agarwal (Future CA) (217 Points)
Replied 31 August 2010

Deepak

the depreciation rate for windmill is 80% as per IT Act and you can claim the additional depreciation on a newly purchased windmill.

If more than 180 days then 20% additional depreciation can be claimed

and if less than 180 days than 10% additional depreciaiton can be claimed

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Sanjay Singh Rana (CA) (208 Points)
Replied 31 August 2010

Originally posted by : Rahul Agarwal
	Deepak the depreciation rate for windmill is 80% as per IT Act and you can claim the additional depreciation on a newly purchased windmill. If more than 180 days then 20% additional depreciation can be claimed and if less than 180 days than 10% additional depreciaiton can be claimed

Agreed with rahul :) 80% will be the rate of deprecialtion and yes u can also claim additional depreciation whether, setting up of windmills is in connection with the main business activity of the Taxpayer or not ......u can refer to ruling of the Madras High Court (HC) in the case of CIT v M/s Hi Tech Arai Limited (Taxpayer) [Tax Case (Appeal) Nos. 670 and 671 of 2009] on the issue of allowability of additional depreciation on newly set-up windmills

thanks :)

Deepak Kumar (Article) (32 Points)
Replied 31 August 2010

Hi, Rahul and Sanjay thanks for passing the info to me, but u left one of my question whether all the components of the windmill can be charged at the depreciation as applicable to Windmill or separate rate can be applied to the parts such as : Transformer, Tower, Blade, Civil Structure and other Electrical Works?

Sanjay Singh Rana (CA) (208 Points)
Replied 31 August 2010

80% is allowed only if it is part of windmill where the asset has its separate identity it must be added to block according to its rates

NAMAN (CA, EY) (55 Points)
Replied 01 September 2010

As Wind - Mill is an power generating equipment.......SLM can also be followed........

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RAMANJU (here to updating the knowledge) (485 Points)
Replied 01 September 2010

Mr. Rahul is very right in answering this query. We have set up Wind Mill @ bellary and claimed 80% depreciation as IT Act and also additional depreciation.

regards,

Ramu