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Depreciation Rate

Nanjundeswar R (Practice) (143 Points)

14 April 2008

Respected All,

Can anyone tell me what is the rate of depreciation for Computer Software.

Thanks.

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92 Replies

Priyanka (Article Trainee) (27 Points)
Replied 14 April 2008

Hi Nanju,

The Depreciation rates for computer software as per The Income Tax Act is 60% and as per the companies act 16.21% if the company is following Written down value method and 40% if the company is following Straight Line Method

Venkatesh Rao (Service) (135 Points)
Replied 14 April 2008

60% as per I.Tax Act

Nagaraju Pogula (Partner) (175 Points)
Replied 14 April 2008

Many companies are taking 40%

Sathish Karunakaran (ACA) (614 Points)
Replied 15 April 2008

Income Tax Act - WDV Method - 60%

Companies Act - WDV - 40% & SLM - 16.21%

(Guest)

hi friends how r u

Rate as per income tax is 60%

As per companies act 40% (wdv)

16.21% (slm)

Atul Kumar (CA) (504 Points)
Replied 15 April 2008

Hi dear

Priyanka, Satish & Ankit are right.

Monika Mulvanshi (service) (81 Points)
Replied 15 April 2008

Deprecaiation on computer software as per the provisions of Income tax Act is 60% .

As per Companies Act ,

a) if WDV method follows :- 16.21%

b) if SLm method follows : 40%

CA. Atindra A. Prabhu Bhatikar (practising CA) (68 Points)
Replied 16 April 2008

My friends, I feel the rate of 40% and 16.21 % WDV and SLM as prescribed under the Cos. Act are for hardware and AS-26 Intangible Assets will prevail for amortization of software. As per the said standard any intangible asset has to be w/o within a period of max 10 yrs; as per para 65 of AS-26, the rate of amortization has to less than even 10 yrs considering the tech obsolescense.

Kindly give ur feedback.