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Basis of depreciation and depreciation rates

Basis of depreciation: - There are some conditions fulfilling only when depreciation is allowed. These conditions are as follows.

Where the assesse is electricity undertaking: - an undertaking engaged in generation or generation and distribution of power is entitled to claim depreciation under any of two following methods.
Written down value
Straight line method.

Where the assesse is any other assesse: - any other assessee can claim depreciation only on written down value method.

Claim of depreciation obligatory: - the assessing officer has to allow depreciation even if it not claimed by the assessee. Claiming of depreciation is now obligatory.

Allow ability of depreciation: - depreciation is allowed to an assessee in case it is established that business either production start or not

Rates of depreciation under Block system
Residential purpose building- 5%

Nonresidential purpose building- 10%

Furnitures and fitting including electricity fittings- 10%

Machinery- 15%

Motor Car- 15%


New commercial vehicles- 50%

Computers- 60%

Ocean going ships- 20%

Vessels- 20%

Patents, copyright, trademark, license, or similar nature intangible assets- 25%

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