Single shift depreciaiton

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 April 2013 Dear Sir,

in our company book is running 3 shift for Depreciation and we count the 3 shift Depreciation.

in current year we purchased and installed new machinery, now can i count single shift Depreciation in new machinery ?

any quarry or object, please guide

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)
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08 April 2013 Dear,
Plz furhter clarify your query. Based on your current writing...

I can only say, that Income tax provide fix rate of Depreciation irrespective of Shift. However for New Machine in Factory you can claim additional Depreciation for the year in which it is purchased.

and in accounts you should follow AS-6

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2013 my query is Companies act Depreciation sch. 14

at present we take full depreciation on all machinary (3 shift) now this year we purchase a new machinery and it is not run in 3 shift so we have to take 1 shift depreciation.

so my query is can i take 1 shift depreciation in selected machinery. any object, problem will rise

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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25 July 2025 Here's a clear explanation about **Depreciation for machinery running in fewer shifts under Companies Act Schedule XIV**:

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### Your situation:

* Your company runs **3 shifts**, so currently you charge **full depreciation** on machinery assuming continuous usage.
* This year, you purchased new machinery which runs **only in 1 shift** (less than existing machines).
* You want to know if you can charge **depreciation for only 1 shift** on this new machinery under **Schedule XIV of Companies Act, 1956 (or Companies Act 2013 corresponding rules)**.

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### Key points:

1. **Schedule XIV (Companies Act) Depreciation & Shifts:**

* Schedule XIV provides **depreciation rates** assuming **single shift usage (8 hours a day, 25 days a month)**.
* If machinery runs for **double shift (16 hours/day)** or **triple shift (24 hours/day)**, depreciation rate is increased proportionately:

* Double shift = 1.5 times the normal rate.
* Triple shift = 2 times the normal rate.

2. **Applicability to Your Case:**

* For machinery running **only 1 shift**, you can charge **normal depreciation rate** as per Schedule XIV.
* For machinery running **3 shifts**, you charge **double the rate** (triple shift rate is 2x normal rate as per old Schedule XIV formula).
* So, you can **charge normal (single shift) depreciation on new machinery** if it runs only one shift.

3. **Effect and Issues:**

* Charging lower depreciation on new machinery (because of fewer shifts) is allowed and reasonable.
* No legal or accounting problem as long as you apply **Schedule XIV rates consistently**.
* Ensure proper disclosure in financial statements about depreciation method.

4. **Income Tax Act:**

* Income Tax depreciation rules are different and allow **additional depreciation** on new machinery.
* For tax purpose, depreciation is calculated as per Income Tax Act, irrespective of shifts.

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### Summary:

| Shift Usage | Depreciation Rate (Schedule XIV) |
| ----------------- | -------------------------------- |
| 1 Shift (normal) | Normal prescribed rate |
| 2 Shifts (double) | 1.5 times normal rate |
| 3 Shifts (triple) | 2 times normal rate |

You **can take 1 shift depreciation on new machinery** running one shift without any issue under Companies Act.

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If you want, I can help draft a note for your accounts team explaining this treatment. Would you like that?

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