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Depreciation rates for buildings, books reduced

The ministry of finance has reduced the depreciation rate for buildings, books and pollution control equipment.

Buildings mainly used for residential purposes, excluding hotels and boarding houses, will be allowed a depreciation of 5 per cent under the Income Tax rules, an official press note said on Friday.

For all other buildings, the depreciation rate would be 10 per cent. The existing rate of 20 per cent available to buildings used as hotels and buildings with dwelling units each with a plinth area not exceeding 80 square metres will no longer be available.

Books other than annual publications used by assessees carrying on profession shall now depreciate at the rate of 60 per cent as against the present rate of 100 per cent whereas books owned by assessees carrying on the business of running lending libraries would continue to depreciate at 100 per cent.

A rate of 80 per cent has been prescribed in case of certain air pollution control equipment, water pollution control equipment, solid waste control equipment, energy saving devices and renewable energy devices which are at present eligible for 100 per cent depreciation.

A single rate of 15 per cent for depreciation of furniture and fittings as against the present rates of 10 per cent and 15 per cent. For computers including computer software, a rate of 60 per cent depreciation has been prescribed.

Another category under the heading buildings has been added so as to include therein buildings which are acquired by the assessee on or after September one, 2002 and in which machinery and plant forming part of water supply project or water treatment system are installed. These assets shall depreciate at the rate of 100 per cent.

UNI

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