DEPRECIATION

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 November 2009 What is the applicable rate of Depr. for
Office equipment
Sccoer, Motor cycle

and
What is the provision regarding extra shift working
Is there ay provision for 100% depr on assets below Rs.5000/-

Aditya Maheshwari

Aditya Maheshwari (Expert)
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25 November 2009 applicable rate of Depr. for
Office equipment
Sccoer, Motor cycle - 15% as per IT

and no provision for 100% depr on assets below Rs.5000/-. It is there in cos act

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2009 What about extar shift working depreciation ?

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2009
What about extar shift working depreciation ?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2024 Let's address each part of your query regarding depreciation rates and provisions:

### 1. Applicable Rates of Depreciation:

**Office Equipment:**
- Office equipment generally falls under the category of "Furniture and Fittings" or "Office Equipment" for depreciation purposes.
- As per the Income Tax Act, 1961 in India, office equipment is typically depreciated at a rate of 10% to 15% under the Written Down Value (WDV) method, depending on the specific item.
- For the Companies Act, 2013, office equipment is classified under Intangible Assets and is depreciated at a rate of 25% on a straight-line basis.
- It's crucial to refer to the specific schedule or list of assets provided in the respective laws to determine the exact rate applicable.

**Scooter, Motorcycle:**
- Vehicles used for business purposes, such as scooters and motorcycles, are classified as "Motor Vehicles" for depreciation purposes.
- Under the Income Tax Act, motor vehicles are typically depreciated at a rate of 15% under the WDV method.
- For the Companies Act, motor vehicles are also categorized under tangible assets and are typically depreciated at a rate of 15% on a straight-line basis.
- Again, specific rates can vary based on the nature of use (commercial or non-commercial) and the specific asset class.

### 2. Extra Shift Working Provision:

**Extra Shift Working:**
- The Income Tax Act, 1961, provides for an additional depreciation allowance for assets used in extra shift working. This allowance allows for a higher rate of depreciation to be claimed to account for the extended use of assets.
- Generally, the extra shift depreciation rate is 20% under the WDV method.
- The Companies Act, 2013, does not explicitly provide for an extra shift depreciation provision. It primarily specifies rates based on the asset class and method of depreciation (WDV or straight-line).

### 3. Provision for 100% Depreciation on Assets Below Rs. 5,000:

**Assets Below Rs. 5,000:**
- For assets whose individual cost is below Rs. 5,000, the Income Tax Act, 1961, allows for an immediate deduction of 100% of the cost as revenue expenditure in the year of acquisition.
- This provision is particularly beneficial for small assets like tools, minor equipment, etc., where the cost is relatively low.
- The Companies Act, 2013, does not have a specific provision for 100% depreciation on assets below Rs. 5,000. However, such low-cost assets may be expensed immediately as per the company's accounting policies.

### Conclusion:

- **Depreciation Rates:** Refer to the specific schedules under the Income Tax Act, 1961, and the Companies Act, 2013, for exact depreciation rates applicable to office equipment, scooters, motorcycles, and other assets.
- **Extra Shift Working:** The Income Tax Act provides for an additional depreciation allowance for assets used in extra shift working, while the Companies Act does not have a similar provision.
- **100% Depreciation on Low-Cost Assets:** The Income Tax Act allows for immediate deduction of 100% of the cost of assets below Rs. 5,000 as revenue expenditure in the year of acquisition.

For precise application and compliance, it's recommended to consult with a qualified tax advisor or accountant who can apply these provisions according to your specific circumstances and ensure adherence to relevant laws and regulations.

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