Excise

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Soumyen Sarkar (Querist)
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18 June 2010 Will anybody please take the pains to explain in detail about claim for depreciation on plants and machinery in Income Tax. How this is related to Cenvat Credit? How deprecation is claimed and why? Is there any formula? I only know that these two benefits cannot be claimed simultaneously.

Prem Ketan

Prem Ketan (Expert)
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21 June 2010 Depreciation calculated on the cost of Fixed asset(Plnat & Machinery).
Cenvat credit rule give two option to take cenvat of capital goods either you take the cenvat or don't take the cenvat add in the cost of assets and claim depreciation.
Example : Machine cost is 1,00,000
Excise duty @10.3% 10,300
cost of Machine 1,10,300

Fist option : Now you can claim the excise duty of Rs. 10300 as cenvat and charged the depreciation on 1,00,000 only.

Second Option : No cenvat credit and chaged depreciation on 1,10,300 present rate on plant and machinery is 15%.

Hope you will get it.

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Soumyen Sarkar

Soumyen Sarkar (Querist)
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21 June 2010 Thanks so much.

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