depreciation on software

whether in any INDIAN act it software is considered as intangible? what income tax act says about the same

Dear Kaya,

I will revert u soon as i m leaving from the office.

regards,

ratan

Dear Kaya,

Plz see  the attached file.

regards,

ratan

thank you so much

Ms Kaya

As per my knowledge, the physical existency of an asset is determined its nature.

As per section 2(11) of income tax act block of computers include ‘computer software & intangibles including –know how, patents, copyrights, trademarks, licenses, franchises and and any other business or commercial rights of similar nature.’

But as per paragraph 7 of AS-26 intangibles include computer software.

So as per IT act it is a part of computer and as per companies act it is an intangible asset.

With all regards the refernce of judgment given above is for income tax purposes only

All AS at one place  

https://www.caclubindia.com/forum/all-as-at-one-place-87927.asp  

Dear Kaya,

Software which is not integral part of hardware is treated as Intangible asset as per AS 26 issued by ICAI.

It also suggets that the amount should be written off over 3 - 5 years depending upon the obsoloscence, technology etc.

So if we take that the life of the S/w is 5 yrs amortisation rate will be 20%p.a

For further info pls refer to the Appendix of the AS 26 it has clearly explained the topic.

Hope now your doubt is cleared