Cbdt notification on depreciation - urgent

Previous year 2016-17 and AY 2017-18 respectively !!
 

With reference to your question,

(a) applies for AY 2017-18 and onwards. (in line with the AY of introduction of section 115BA)

(b) There is a lot of ambiguity regarding applicability of such notification. But I would say the reduced rate of depreciation for ALL taxpayers applies only from AY 2018-19. 

Refer:

https://www.taxsutra.com/content/has-govt-notification-unintentionally-restricted-depreciation-rate-40-all-taxpayers

Yes, its same i.e. effective from AY 2017-18; but the intention of the notification  seems to restrict depreciation only in respect of companies covered by Sec 115BA. CBDT's clarification for other assessees awaited.

@ Dhirajlal sir..

The notification has directly amended the Appendix I of the Income Tax Rules.. and replaced & restricted 'all rates exceeding 40%' to 40%. Once the Appendix has been amended, the new depreciation rates shall apply to ALL ASSESSEES.

Now the only ambiguity is with regard to the AY in which the amendment applies for ALL assessees. Here the CBDT may have to clarify.

Also the link to the amended 'NEW APPENDIX I' as hosted on the incometaxindia website is given below:

https://www.incometaxindia.gov.in/Rules/Income-Tax%20Rules/2008/103120000000007563.htm

Of course I agree that there  is ambiguity with regard to the AY from which it is applicable. CBDT has to come out with some clarification.

But it is well settled law in the Income tax law that wef 1st April 2016 and 1st April 2017 mean AY 2016-17 and AY 2017-18 respectively.

Please share your views.

	@ Dhirajlal sir.. The notification has directly amended the Appendix I of the Income Tax Rules.. and replaced & restricted 'all rates exceeding 40%' to 40%. Once the Appendix has been amended, the new depreciation rates shall apply to ALL ASSESSEES. Now the only ambiguity is with regard to the AY in which the amendment applies for ALL assessees. Here the CBDT may have to clarify.   Also the link to the amended 'NEW APPENDIX I' as hosted on the incometaxindia website is given below: https://www.incometaxindia.gov.in/Rules/Income-Tax%20Rules/2008/103120000000007563.htm

The depreciation chart as mentioned above is for the companies covered u/s. 115BA 

For others the effective depreciation u/s.32(1)(ii), the chart is as below:

https://www.incometaxindia.gov.in/charts%20%20tables/depreciation%20rates.htm

There is no restriction of 40% for other companies. (refer for clarification::

 https://www.taxsutra.com/news/16698/CBDT-Restricts-depreciation-to-40-for-manufacturing-companies-opting-for-concessional-taxation-u-s-115BA

Quoting some text from the refrence provided by you i.e.

https://www.taxsutra.com/content/has-govt-notification-unintentionally-restricted-depreciation-rate-40-all-taxpayers
 

"The Rule 5 has been amended w.e.f. April 1, 2016 and inserts a new proviso restricting depreciation allowance to 40% in case of domestic companies opting concessional taxation under newly inserted Sec 115BA. Finance Act, 2016 introduced Sec. 115BA............."

"Based on the overall 'spirit' of the notification, the intention seems to restrict depreciation only in respect of companies covered by Sec 115BA.  However, a strict reading suggests otherwise. Hence, a clarification on this aspect from the CBDT would be immensely helpful."

"To amend the new Appendix IA read with rule 5 of Income-tax Rules, 1962 to provide that highest rate of depreciation under the Income-tax Act shall be restricted to 40% w.e.f 01.4.2017. (i.e. from previous year 2017-18 and subsequent years). The new rate is proposed to be made applicable to all the assets (whether old or new) falling in the relevant block of assets."

My reply to the above post is not getting uploaded. Some technical glitch in the CAClubindia System.

I have instead attached a file containing my views. Please refer the same.

Also attaching another article which supports this interpretation.

In this article, it is stated that Depreciation rate is restricted to 40% for ALL assessees and that this amendment applies only from AY 2018-19.

Well, There was proposal for the restriction of depreciation to 40 % for all the assessee in the finance bill, but I had been waiting for CBDT notification in its regards.

As per the articles, even the authors are not sure about its implementation and awaiting CDBT clarification may be for date of implementation for all assessees.

Thanks for enlighting.

In the Notification, it is NOT specifically mentioned that reduced rate of Depreciation (40%) is applicable to all Assessees but since the Appendix I is amended with 40% wherever required and that Appendix is appplicable to all the Assessees, it is to be interpreted that reduced rate of Depreciation is applicable to all the Assessees.

Regarding applicability of the Notification, the CBDT has to issue some clarification.

And the same would be applicable to all other assessees from AY 2018-19

Yes. I agree. Now we have consensus-ad-idem.