New Commercial Vehicle

Recently a notification issued by the CBDT regarding depreciation on new commercial vehicle, let us have a look on that notification:

S.O. 197(E).- In exercise of the powers conferred by section 295 of the

Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (Third Amendment) Rules, 2009.

     (2) They shall come into force on the 1st day of April 2009. .

2. In the Income-tax Rules, 1962, in the Table to New Appendix I, in Part-A relating to TANGIBLE ASSETS, under the heading III. MACHINERY AND PLANT, in item (3), after sub-item (vi) and entries relating thereto, the following shall be inserted, namely:-

"(via) 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 [See paragraph 6 of the

Notes below this Table]                                                                              50".

[Notification No. 10/2009/F.No.142/01/09- TPL]

V.Vizay Babu,

Under Secretary (TPL-III).

Note:- The principal rules were published vide notification

number.S.O.969(E), dated the 26th March, 1962 and last amended

by the Income-tax (2nd Amendment) Rules, 2009 vide notification

S.O. No.20(E) dated the 5th January, 2009.

          By this notification, if the assessee purchases new commercial vehicle from 1^st January 2009 to 1^st April 2009 and put to use before 1^st April 2009 for the purpose of business or profession, that new commercial vehicle is eligible for 50% Depreciation. So, let us what is meant by commercial vehicle?

          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”. The expressions “heavy goods vehicle”, “heavy passenger motor vehicle”, “light motor vehicle”, “medium goods vehicle”, “medium passenger motor vehicle”, “maxi-cab”, “motor-cab”, “tractor” and “road-roller” are defined under section 2 of the Motor Vehicles Act, 1988 (59 of 1988).

          Heavy goods vehicle means any goods carriage the gross vehicle weight of which exceeds 12,000 kilograms, if tractor or road-roller the unladen weight of any of which exceeds 12,000 Kilograms

          Heavy passenger motor vehicle means any public service vehicle or private service vehicle or educational institution bus or omnibus the gross vehicle weight of any of which exceeds 12,000 kilograms, if it is motorcar the unladen weight of which exceeds 12,000 kilograms.

          Light motor vehicle means a transport vehicle or omnibus the gross vehicle weight of either of which exceeds 7,500 Kilograms, if a motor car or tractor or road-roller the unladen weight of any of which exceeds 7,500 Kilograms.

          Medium goods vehicle means any goods carriage other than a light motor vehicle or heavy goods vehicle.

          Medium passenger motor vehicle means any public service vehicle or heavy passenger motor vehicle or educational institutional bus other than a motor cycle, invalid carriage, light motor vehicle or heavy passenger motor vehicle.

          Maxi-cab means any motor vehicle constructed or adapted to carry more than six passengers, but not more than twelve passengers, excluding the driver, for hire or reward.

          Motor-cab means any motor vehicle constructed or adapted to carry not more than six passengers excluding driver for hire or reward.

          Tractor means a motor vehicle which is not itself constructed to carry any load (other than equipment used for the purpose of propulsion) but excludes a road roller.

          What is the need of this notification? Due to recession, the vehicle manufacturers are affected, to relieve them, CBDT issued this notification, so if you have plan to purchase goods carriage vehicles, which fall under above categories, purchase now to claim 50% depreciation.