Depreciation on Software

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Mihir (Querist)
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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)
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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)
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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)
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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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