Depreciation on Software

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Mihir (Querist)

05 August 2008 A company has purchased computer software worth Rs.30 Lacs. Can company claim depreciation @15% considering it as general plant & machinery? or it has to claim the depreciation @60% as per the income tax act?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

05 August 2008 Computer System comprises Hardware and software,and both are conclusive part of each other. One can not perform without the other. Software as such is also a part of computer system and it can be depreciated @ 60%.

Mihir

Mihir (Querist)

05 August 2008 Thanks Ramesh......but Can it be dereciated at a lower rate of 15%? or because it is a software depreciation has to be claimed @60%. my intention is to claim depreciation at a lower rate so that expenses are spread out evenly over the uears? is it valid?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

07 August 2008 yes, it can be but a note to that effect is required to be given in the Note to Accounts or otherwise the Auditor will have to qualify the Audit Report.

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