05 July 2016
Hello everyone,
I have a query related to the application of depreciation on smartphones as per income tax act 1961
as we generally know that mobile phones are charged a depreciation rate of 15% (block -plant & machinery) but nowadays phones have become smart and can do the same work as of a computer...these are also taking the place of computers ..so why are they not charged depreciation rate of 60%, and why 15%
please solve my query relating to the correct depreciation rate
thanks in advance
05 July 2016
There have been some judgement in this regards in which it was held that since the primary function of a smartphone is telecommunication, it should not be regarded as computer. A Laptop or a tab on other hand can provide telecommunication facilities but that is not their primary objective. This view is not just prevailing just under Income Tax Act but also under Central Excise Act due to classification issues and CBEC had issued circular explaining all this.
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