SCHEDULE XIV - Rates of depreciation - Companies Act, 1956

[1] [SCHEDULE XIV Rates of depreciation ( See sections 205 and 350) Nature of assets Single Shift Double Shift Triple Shift W.D.V. S.L.M. W.D.V. S.L.M. W.D.V. S.L.M. 1 2 3 4 5 6 7 I. ( a ) Buildings (other than factory buildings) (NESD) 5 per cent 1.63 per cent .. .. .. .. ( b ) Factory buildings 10 per cent 3.34 per cent .. .. .. .. ( c ) Purely temporary erections such as wooden structures 100 per cent 100 per cent II. Plant and Machinery [2] [( i ) General rate applicable to, ( a ) plant and machinery (not being a ship) 13.91 per cent 4.75 per cent 20.87 per cent 7.42 per cent 27.82 per cent 10.34 per cent other than continuous process plant for which no special rate has been prescribed under ( ii ) below: ( b ) continuous process plant, [3] [* * *] for which no special rate has been prescribed under ( ii ) below. (NESD)] 15.33 per cent 5.28 per cent .. .. .. .. ( ii ) Special rates A. 1. Cinematograph films- Machiney used in the production and exhibition of cinematograph films (NESD) 20 per cent 7.07 per cent .. .. .. .. ( a ) Recording equipment, reproducing equipment, developing machines, printing machines, editing machines, synch ronisers and studio lights except bulbs 20 per cent 7.07 per cent .. .. .. .. ( b ) Projecting equi-pment of film exhibiting concerns -do- -do- .. .. .. .. 2. Cycles (NESD) 20 per cent 7.07 per cent [4] [3. Electrical Machinery, X-ray and electrotherapeutic apparatus and accessories thereto, medical, diagnostic equipments, namely, Cat-scan, Ultrasound Machines, ECG Monitors, etc. (NESD) 20 per cent 7.07 per cent .. .. .. .. 4. Juice boiling pans (karhais) (NESD) 20 per cent 7.07 per cent .. .. .. .. 5. Motor-cars, motor cycles, scooters and other mopeds (NESD) 25.89 per cent 9.5 per cent .. .. .. .. 6. Electrically operated vehicles including battery powered or fuel call powered vehicles (NESD) 20 per cent 7.07 per cent .. .. .. .. 7. Sugarcane crushers (indigenous kolus and belans) (NESD) 20 per cent 7.07 per cent .. .. .. .. 8. Glass manufacturing concerns except direct fire glass melting furnaces - Recuperative and regenerative glass melting furnaces 20 per cent 7.07 per cent 30 per cent 11.31 per cent 40 per cent 16.21 per cent 9. Machinery used in the manufacture of electronic goods and components. 15.62 per cent 5.38 per cent 23.42 per cent 8.46 per cent 31.23 per cent 11.87 per cent B. [5] [1. Aeroplanes, Aero Engines, Simulators, Visual System and Quick Engine Change Equipment (NESD) 16.2 per cent 5.6 per cent] 2. Concrete pipes manufacture Moulds (NESD) 30 per cent 11.31 per cent .. .. .. .. 3. Drum container manufacture dies (NESD) -do- -do- .. .. .. .. 4. Earth-moving machinery employed in heavy construction works, such as dams, tunnels, canals, etc. (NESD) -do- -do- .. .. .. .. 5. Glass manufacturing concerns except direct fire glass melting furnaces Moulds (NESD) -do- -do- .. .. .. .. 6. Moulds in iron foundaries (NESD) -do- -do- .. .. .. .. 7. Mineral oil concerns Field operations (above ground) Portable boilers drilling tools, well-head tanks, rigs, etc. (NESD) -do- -do- .. .. .. .. 8. Mines and quarries‑ Portable underground machinery and earth moving machinery used in open cast mining (NESD) -do- -do- .. .. .. .. 9. Motor buses and motor lorries other than those used in a business of running them on hire (NESD) 30 per cent 11.31 per cent .. .. .. .. 9A. Motor tractors, harves-ting combines (NESD) -do- -do- .. .. .. .. 10. Patterns, dies and templates (NESD) -do- -do- .. .. .. .. 11. Ropeway structures‑ Ropeways, ropes and trestle sheaves and connected parts (NESD) -do- -do- .. .. .. .. 12. Shoe and other leather goods factories‑Wooden lasts used in the manufacture of shoes. 30 per cent 11.31 per cent 45 per cent 18.96 per cent 60 per cent 29.05 per cent C. [6] [1. * * *] 2. Motor buses, motor lorries and motor taxies used in a business of running them on hire (NESD) 40 per cent 16.21 per cent .. .. .. .. 3. Rubber and plastic goods factories Moulds (NESD) -do- -do- .. .. .. .. 4. Data processing machines including compu-ters (NESD) -do- -do- .. .. .. .. 5. Gas cylinders including valves and regulators (NESD) -do- -do- .. .. .. .. D. 1. Artificial silk manufacturing machinery wooden parts 100 per cent 100 per cent .. .. .. .. 2. Cinematograph films Bulbs of studio lights -do- -do- .. .. .. .. 3. Flour mills Rollers -do- -do- .. .. .. .. 4. Glass manufacturing concerns Direct fire glass melting furnaces 100 per cent 100 per cent .. .. .. .. [7] [4A. Float Glass Melting Furnaces (NESD) 27 per cent 10 per cent .. .. .. ..] 5. Iron and Steel industries Rolling mill rolls 100 per cent 100 per cent .. .. .. .. 6. Match factories Wooden match frames -do- -do- .. .. .. .. 7. Mineral oil con cerns ( a ) - Plant used in field opera tions (below ground) - Distribution - returnable packages ( b ) Plant used in field operations (below ground) but not inclu-ding assets used in field opera tions (distribution) - Kerbside pumps including under ground tanks and fittings 100 per cent 100 per cent .. .. .. .. 8. Mines and quar ries - ( a ) Tubs, winding ropes, haulage ropes and sand stowing pipes ( b ) Safety lamps -do- -do- .. .. .. .. 9. Salt works - Salt pans, reservoirs and condensers, etc., made of ear-thy, sandy or clay mate-rial or any other similar material -do- -do- .. .. .. .. 10. Sugar works Rollers -do- -do- .. .. .. .. III. Furniture and fittings [8] [1. General Rates (NESD) 18.1 per cent 6.33 per cent .. .. .. .. 2. Rate for furniture and fittings used in hotels, restaurants and boarding houses; schools, colleges and other educational institutions, libraries; welfare centres; meeting halls, cinema houses; theatres and circuses; and for furniture and fittings let out on hire for use on the occasion of marriages and similar functions. (NESD)] 25.88 per cent 9.5 per cent .. .. .. .. IV. Ships 1. Ocean-going ships- ( i ) Fishing vessels with wooden hull (NESD) 27.05 per cent 10 per cent .. .. .. .. ( ii ) Dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes (NESD) 19.8 per cent 7 per cent .. .. .. .. ( iii ) Other ships (NESD) 14.6 per cent 5 per cent .. .. .. .. 2. Vessels ordinarily operating on inland waters- ( i ) Speed boats (NESD) 20 per cent 7.07 per cent .. .. .. .. ( ii ) Other vessels (NESD) 10 per cent 3.34 per cent .. .. .. .. 19 [ V- Intangible Assets 1. Intangible Assets (Toll Road) created under Build, Operate and Transfer, Build, Own, Operate and Transfer or any other form of Public Private Partnership Route. Amortization Rate = Amortization Amount x 100 Cost of Intangible Asset (A) Amortization Amount = Cost of Intangible Asset (A) X Actual Revenue for the year (B) Projected Revenue from Intangible Asset (till the end of the concession period) (C) 2. Meaning of particulars are as follows:- Cost of Intangible Asset (A) = Cost incurred by the Company in accordance with the Accounting Standards. Actual Revenue for the year (B) = Actual Revenue (Toll Charges) received during the accounting year. Projected Revenue from Intangible Asset (C) = Total Projected Revenue from the Intangible Asset as provided to the Project Lender at the time of financial closure/agreement. The amortization amount or rate should ensure that the whole of the cost of the intangible asset is amortized over the concession period. Total Revenue shall be reviewed at the end of each financial year and the projected revenue shall be adjusted to reflect any changes in the estimate which will lead to the actual collection at the end of the concession period. 3. For Example:‑ Cost of creation of Intangible Assets ₹ 500/- Crores Total period of Agreement 20 Years Time use for creation of Intangible Assets 02 Years Intangible Assets to be amortized in 18 Years Let us assume that the Total revenue to be generated out of Intangible Assets over the Period would be ₹ 600 Crores, in the following manner:- Year No. Revenue (In Rs. Crores) Remarks Year 1 5 Actual Year 2 7.5 Estimate* Year 3 10 Estimate* Year 4 12.5 Estimate* Year 5 17.5 Estimate* Year 6 20 Estimate* Year 7 23 Estimate* Year 8 27 Estimate* Year 9 31 Estimate* Year 10 34 Estimate* Year 11 38 Estimate* Year 12 41 Estimate* Year 13 46 Estimate* Year 14 50 Estimate* Year 15 53 Estimate* Year 16 57 Estimate* Year 17 60 Estimate* Year 18 67.5 Estimate* Total 600 * will be actual at the end of financial year. Based on this the charge for first year would be ₹ 4.16 Crore (approximately) (i.e. ₹ 5/₹ 600 X ₹ 500 Crores) which would be charged to profit and loss and 0.83% (i.e. ₹ 4.16 Crore/₹ 500 Crore X 100) is the amortization rate for the first year. ] W.D.V.: means Written Down Value. S.L.M.: means Straight Line Method. Notes .-1. buildings include roads, bridges, culverts, wells and tube-wells. 2. factory buildings does not include offices, godowns, officers and employees' quarters, roads, bridges, culverts, wells and tube-wells. 3. speed boat means a motor boat driven by a high speed internal combustion engine capable of propelling the boat at a speed exceeding 24 kilometers per hour in still water and so designed that when running at a speed it will plane, i.e. , its bow will rise from the water. 4. 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. 5. The following information should also be disclosed in the accounts: ( i ) depreciation methods used; and ( ii ) depreciation rates or the useful lives of the assets, if they are different from the principal rates specified in the Schedule. 6. The calculations of the extra depreciation for double shift working and for triple shift working shall be made separately in the proportion which the number of days for which the concern worked double shift or triple shift, as the case may be, bears to the normal number of working days during the year. For this purpose, the normal number of working days during the year shall be deemed to be- ( a ) in the case of a seasonal factory or concern, the number of days on which the factory or concern actually worked during the year or 180 days, whichever is greater; ( b ) in any other case, the number of days on which the factory or concern actually worked during the year or 240 days, whichever is greater. The extra shift depreciation shall not be charged in respect of any item of machinery or plant which has been specifically, excepted by inscription of the letters N.E.S.D. (meaning No Extra Shift Depreciation ) against it in sub-items above and also in respect of the following items of machinery and plant to which the general rate of depreciation of [9] [13.91 per cent] applies- (1) Accounting machines (2) Air-conditioning machinery including room air-conditioners (3) Building contractor's machinery. (4) Calculating machines. (5) Electrical machinery - switchgear and instruments, transformers and other stationary plant and wiring and fitting of electric light and fan installations. (6) Hydraulic works, pipelines and sluices (7) Locomotives, rolling stocks, tramways and railways used by concerns, excluding railway concerns. (8) Mineral oil concerns - field operations: [10] [( a ) * * *] ( b ) Prime movers. [11] [( c ) * * *] ( d ) Storage tanks (above ground). ( e ) Pipelines (above ground). ( f ) Jetties and dry docks. (9) Mineral oil concerns - field operations (distribution) - kerbside pumps, including underground tanks and fittings. (10) Mineral oil concerns - refineries: [12] [( a ) * * *] ( b ) Prime movers. [13] [( c ) * * *] [14] [( d ) LPG Plant] (11) Mines and quarries: ( a ) Surface and underground machinery (other than electrical machinery and portable underground machinery). ( b ) Head-gears. ( c ) Rails. [15] [( d ) * * *] ( e ) Shafts and inclines. ( f ) Tramways on the surface. (12) Neo-post franking machines. (13) Office machinery (14) Overhead cables and wires. (15) Railway sidings. (16) Refrigeration plant containers, etc. (other than racks). (17) Ropeway structures: ( a ) Trestle and station steel work. ( b ) Driving and tension gearing. (18) Salt works - Reservoirs, condensers, salt pans, delivery channels and piers if constructed of masonry, concrete, cement, asphalt or similar materials; barges and floating plant; piers, quays and jetties; and pipelines for conveying brine if constructed of masonry, concrete, cement, asphalt or similar materials. (19) Surgical instruments (20) Tramways electric and tramways run by internal combustion engines - permanent way: cars - car trucks, car bodies, electrical equipment and motors; tram cars including engines and gears. (21) Typewriters. (22) Weighing machines. (23) Wireless apparatus and gear, wireless appliances and accessories.] [16] [* * *] [17] [7. Continuous process plant means a plant which is required and designed to operate 24 hours a day. 8. Notwithstanding anything mentioned in this Schedule depreciation on assets, whose actual cost does not exceed five thousand rupees, shall be provided depreciation at the rate of hundred per cent:] [18] [Provided that where the aggregate actual cost of individual items of plant and machinery costing ₹ 5,000 or less constitutes more than 10 per cent of the total actual cost of plant and machinery, rates of depreciation applicable to such items shall be the rates as specified in Item II of the Schedule.] -------------------------------------------- Notes:- [1] Inserted by the Companies (Amendment) Act, 1988, w.r.e.f. 2-4-1987. [2] Substituted by Notification No. GSR 756(E), dated 16-12-1993. [3] Omitted by Notification No. GSR 101(E), dated 1-3-1995. For words other than those [4] Substituted by Notification No. GSR 756(E), dated 16-12-1993. [5] Substituted by Notification No. GSR 788(E), dated 4-11-1994. [6] Omitted by Notification No. GSR 788(E), dated 4-11-1994. [7] Inserted by Notification No. GSR 500(E), dated 18-8-1998. [8] Substituted by Notification No. GSR 756(E), dated 16-12-1993. [9] Substituted for 15 per cent by Notification No. GSR 756(E), dated 16-12-1993. [10] The word Boilers omitted by Notification No. GSR 756(E), dated 16-12-1993. [11] The word Process Plants omitted, by Notification No. GSR 756(E), dated 16-12-1993. [12] The word Boilers omitted by Notification No. GSR 756(E), dated 16-12-1993. [13] The word Process Plants omitted by Notification No. GSR 756(E), dated 16-12-1993. [14] Inserted by Notification No. GSR 416(E), dated 14-5-1993. [15] The word Boilers omitted by Notification No. GSR 756(E), dated 16-12-1993. [16] Clause (24) omitted by Notification No. GSR 756(E), dated 16-12-1993. Earlier it was inserted by Notification No. GSR 416(E), dated 14-5-1993 and read as under: (24) Chemical benefication process for magnesite ore. [17] Inserted by Notification No. GSR 756(E), dated 16-12-1993. [18] Inserted by Notification No. 101(E), dated 1-3-1995. 19. Inserted vide Notification No. F. No.17/292/2011 CL-V dated 17-04-2012