Rates of Depreciation under Companies Act, 2013 [ Depreciation Rate Chart]

as per Part "C" of Schedule II of the Companies Act, 2013 after making following assumptions:

  1. The useful life to compute depreciation of the asset has been taken as per Part C of Schedule II
  2. The residual value of an asset has been taken as 5% of the original cost of the asset

Nature of Assets

Useful LIFE

Rate [SLM]

Rate [WDV]

Buildings [NESD]

Building (other than factory buildings) RCC Frame Structure

Building (other than factory buildings) other than RCC Frame Structure

Fences, wells, tube wells

Other (including temporary structure, etc.)

II

Bridges, Culverts, Bunkers, Etc. [NESD]

30 Years

3.17%

III

Roads [NESD]

Carpeted Roads

Carpeted Roads - RCC

Carpeted Roads - other than RCC

Non-carpeted roads

IV

Plant and Machinery

General rate applicable to Plant and Machinery not covered under Special Plant and Machinery

Plant and Machinery other than continuous process plant not covered under specific

Continuous process plant for which no special rate has been prescribed under (ii) below

Special Plant and Machinery

(i)

Plant and Machinery related to production and exhibition of Motion Picture Films

Cinematograph films - Machinery used in the production and exhibition of cinematograph films, recording and reproducing equipments, developing machines, printing machines. editing machines. synchronizers and studio lights

Projecting equipment for exhibition of films

(ii)

Plant and Machinery used in glass

Plant and Machinery except direct fire glass melting furnaces - Recuperative and regenerative glass melting furnaces

Plant and Machinery except direct fire glass melting furnaces - Moulds [NESD]

Float Glass Melting Furnaces [NESD]

(iii)

Plant and Machinery used in mines and quarries Portable underground machinery and earth moving machinery used in open cast mining

8 Years

11.88%

31.23%

(iv)

Plant and Machinery used in Telecommunications [NESD]

Telecom transceivers, switching centres, transmission and other network equipment

Telecom - Ducts, Cables and optical fibre

(v)

Plant and Machinery used in exploration, production and refining oil and gas [NESD]

Oil and gas assets (including wells), processing plant and facilities

Storage tanks and related equipment

Field operations (above ground) Portable boilers, drilling tools, well-head tanks, etc.

(vi)

Plant and Machinery used in generation, transmission and distribution of power [NESD]

Thermal /Gas/ Combined Cycle Power Generation Plant

Hydro Power Generation Plant

Nuclear Power Generation Plant

Transmission lines, cables and other network assets

Wind Power Generation Plant

Electric Distribution Plant

Gas Storage and Distribution Plant

Water Distribution Plant including pipelines

(vii)

Plant and Machinery used in manufacture of

Rolling mill in steel plant

Basic Oxygen Furnace Converter

(viii)

Plant and Machinery used in manufacture of non-ferrous metals

Metal pot line [NESD]

Bauxite crushing and grinding section

Digester Section [NESD]

Equipment for Calcinations [NESD]

Copper Smelter [NESD]

Equipment for Scalping, Slitting, etc. [NSED]

Surface Miner, Ripper Dozer, etc. used in mines

Copper refining plant [NSED]

(ix)

Plant and Machinery used in medical and surgical operations [NESD]

13 Years

7.31%

20.58%

Electrical Machinery, X-ray and electrotherapeutic apparatus and accessories thereto, medical, diagnostic equipment, namely, Cat-scan, Ultrasound Machines, ECG Monitors, etc.

(x)

Plant and Machinery used in manufacture of pharmaceuticals and chemicals [NESD]

Drying equipments / Centrifuges and Decanters

(xi)

Plant and Machinery used in civil construction

Concreting, Crushing, Piling Equipments and Road Making Equipments

Heavy Lift Equipments—

>> Cranes with capacity more than 100 tons

>> Cranes with capacity less than 100 tons

Transmission line, Tunneling Equipment [NESD]

Others including Material Handling/Pipeline/Welding Equipments [NESD]

(xii)

Plant and Machinery used in salt works [NESD]

15 Years

6.33%

18.10%

(V)

Furniture and Fittings [XESD]

General furniture and fittings

Furniture and fittings used in hotels, restaurants and boarding houses, schools, colleges and other education institutions, libraries, welfare centres, meeting halls, cinema houses, theatres and circuses and furniture and fittings let out on hire for used on occasion of marriages and similar functions

VI

Motor Vehicles [NESD]

Motor cycles. scooters and other mopeds

Motor buses, motor lorries, motor cars and motor taxies used in a business of running them on hire

Motor buses, motor lorries, motor cars and motor taxies other than those used in a business of running them on

Motor tractors, harvesting combines and heavy
vehicles

Electrically operated vehicles including battery powered or fuel cell powered vehicles

VII

Ships [NESD]

Bulk Carriers and liner vessels

Crude tankers, product carriers and easy chemical carriers with or without conventional

Chemicals and Acid Carriers

With Stainless steel tanks

With other tanks

Liquefied gas carriers

Conventional large passenger vessels which are used for cruise purpose also

Coastal service ships of all categories

Offshore supply and support vessels

Catamarans and other high speed passenger for ships or boats

Fishing vessels with wooden hull

Dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging

Vessels ordinarily operating on inland waters

VIII

Aircrafts or Helicopters [NESD]

20 Years

4.75%

13.91%

IX

Railway siding. locomotives, rolling stocks, tramways and railway used by concerns, excluding railway

15 Years

6.33%

18.10%

X

Ropeway structures [NESD]

15 Years

6.33%

18.10%

XI

Office equipment [NESD]

5 Years

19.00%

45.07%

XII

Computers and data processing units INESDI

Servers and networks

6 Years

End user devices, such as, desktops. laptops, etc.

XIII

Laboratory equipment [NESD]

General laboratory equipment

Laboratory equipments used in education institutions

XIV

Electrical Installations and Equipment [NESD]

10 Years

9.50%

25.89%

XV

Hydraulic woks, pipelines and sluices [NESD]

15 Years

6.33%

18.10%

The useful life of an asset shall not be longer than the useful life specified in Part 'C' and the residual value of an asset shall not be more than 5% of the original cost of the asset. However, where a company uses a useful life or residual value of the asset which is different from the above limits, justification for the difference shall be disclosed in its financial statement.

  1. "Factory buildings" does not include offices, godowns, staff quarters.
  2. Where, during any financial year, any addition has been made to any asset, or where any asset has been sold, discarded, demolished or destroyed, the depreciation on such assets shall be calculated on a pro rata basis from the date of such addition or, as the case may be, up to the date on which such asset has been sold, discarded, demolished or destroyed.
  3. The following information shall also be disclosed in the accounts, namely:— (i) depreciation methods used; and (ii) the useful lives of the assets for computing depreciation, if they are different from the life specified in the Schedule.
  4. Useful life specified in Part C of the Schedule is for whole of the asset. Where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part shall be determined separately.
  5. Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value. Ordinarily, the residual value of an asset is often insignificant but it should generally be not more than 5% of the original cost of the asset.
  6. The useful lives of assets working on shift basis have been specified in the Schedule based on their single shift working. Except for assets in respect of which no extra shift depreciation is permitted (indicated by NESD in Part C above), if an asset is used for any time during the year for double shift, the depreciation will increase by 50% for that period and in case of the triple shift the depreciation shall be calculated on the basis of 100% for that period.
  7. From the date this Schedule comes into effect, the carrying amount of the asset as on that date—
    1. shall be depreciated over the remaining useful life of the asset as per this Schedule;
    2. after retaining the residual value, shall be recognised in the opening balance of retained earnings where the remaining useful life of an asset is nil.

    Intangible asset

    For intangible assets, the provisions of the accounting standards applicable for the time being in force shall apply, except in case of intangible assets (Toll Roads) created under 'Build, Operate and Transfer', 'Build, Own, Operate and Transfer' or any other form of public private partnership route in case of road projects. Amortisation in such cases may be done as prescribed in para 3(ii) of Part A of Schedule II.

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