Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Depreciation rate

CA. Tushar Mittal (CA Professional in Practice) (73 Points)

28 May 2012

What is Depreciation rate on Crockery, Kitchen Items for Restaurents & Bar :

1. As per Company's Act

2. As per Income Tax Act

Kindly tell me.

Reply
Follow
Share

13 Replies

NEERAJ KUMAR (CA FINAL) (78 Points)
Replied 28 May 2012

Hi, Tushar

The depreciation rate on Crockery, Kitchen Items for Restaurant & Bar should be:-

1. Uner Income Tax Act, 1961 15% (Considered as Plant & Machinery)

2. Under Companies Act, 1956 13.91% (Also Considered as Plant & Machinery)

Upgrade to CAclubindia Pro. Subscribe Now!

CA. Tushar Mittal (CA Professional in Practice) (73 Points)
Replied 29 May 2012

Hello Neeraj,

I had also seen those dep. rates but these items are like consumable items. Thier life is short. they got broken and replaced frequently. this rate of dep. will be very low for these.

These should be charged at high rate of dep., but it could not found the higher rate.

Thanks for replying but try if u could found anywhere higher rate of dep. for these items.

Ankit (Articles) (390 Points)
Replied 29 May 2012

these are ites are consyumable so that the rates applicable for this will be very high.

Ankit (Articles) (390 Points)
Replied 29 May 2012

these are ites are consumable so that the rates applicable for this will be very high.

NEERAJ KUMAR (CA FINAL) (78 Points)
Replied 29 May 2012

Hi Tushar,

if such crockery & kitchen items are subject to frequently replaced i.e. used within one year then there is no requirement to consider as assets and it should be considered as consumables in the very first year (i.e. 100% charged to Profit & Loss Account)

Upgrade to CAclubindia Pro. Subscribe Now!

CA Priyaadarshini (CA) (105 Points)
Replied 29 May 2012

Hi Tushar,

generally the value of these items will be less than Rs 5000. Hence it should be written off fully i.e 100% depreciation(under companies act)

Under IT Act, it can be taken as plant and machinery.

CA Varun Arora (CA) (286 Points)
Replied 29 May 2012

What is Depreciation rate on Trademark :

1. As per Company's Act

2. As per Income Tax Act

please help....

NEERAJ KUMAR (CA FINAL) (78 Points)
Replied 29 May 2012

Hi Tushar,

PIYUSH SHARMA (Accountant) (29 Points)
Replied 24 August 2012

hello sir this is my first post well i want to know that what is the depreciation rate of motor cars for motor car seller. if motor cars sale in six month or if no sale all year

(Guest)

For crockery at restaurant - 100%, since its a consumable item.

Kitchen appliances can be written off at 15% under Income Tax Act, and any higher percentage under Companies Act considering the higher wear and tear. However, if you have a warranty period extending beyond a year, you could choose to use that as a base for calculating the period over which you wish to depreciate.

For trademarks, rate as per Income Tax act would be 25%, companies act would depend on the time you believe you would get returns from it.

Motor cars for motor car seller would be Stock in Trade, and would not qualify as fixed asset. Hence, no depreciation needs to be charged on it.

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

PRASAD PRVSG (GT) (21 Points)
Replied 01 September 2012

Hi... Piyush... Depreciation can b charged only on assets. Since a car is not an asset to whom it is stock in trade, no dep should b charged on it, even if it is in stock throught d yr. However at d end of fy it should b valued at lower of its cost r net realisable value as per AS2 n diff. can b deited to P&L A/c.

Veerendra Kumar.D (Executive-Accounts/Audit) (21 Points)
Replied 20 January 2014

Hello sir

Can any one please let me know the rate of depreciation to be charged on crockery & cutlery if the cost is more than 7 lac......

CA SAIYAM PARIKH (Practice) (45 Points)
Replied 30 January 2014

Hi Tushar,

As per companies act,depreeciation on motor car shoud be taken from the very first day of financial year till the date of sale of motor car.

As per income tax,depreciation shold be charged on block of asset and if,asset is not available on last day of financial year then no question arise for depreciation. Motor cars for motor car seller would be Stock in Trade, and would not qualify as fixed asset. Hence, no depreciation needs to be charged on it.