Additional Depreciation - Section 32(1)(iia) - Income Tax - Ready Reckoner - Income Tax

Additional Depreciation - Section 32(1)(iia) Assessee who is engaged in business of production/manufacture of any article or thing or generation, transmission or distribution of power are only eligible for additional depreciation. Depreciation is allowed in the case of any new machinery or plant other than ships and aircraft @ 20% of actual cost. Provided that no deduction shall be allowed in respect of any second hand machinery or plant whether Indian or imported or any machinery or plant installed in any office premises or any residential accommodation or guest house or any other appliances or ships, aircraft transport vehicles or any machinery or plant, the whole of the actual cost of which is allowed as deduction in any one previous year by way of depreciation or under section 35(1)(iv) . Note: If the new plant and machinery is put to use for less than 180 days in the year in which it is acquired, the additional depreciation would be restricted to 10% of cost of new plant and machinery in the year it is acquired. As per the amendment, if the asset is put to use for less than 180 days in the year of acquisition, then additional depreciation would be 10% of the cost of acquisition in the first year and the balance 10% would be available in the immediately succeeding previous year. Additional depreciation in the case of generation or generation and distribution of power Additional depreciation is allowed only if assessee follow WDV method. it is not allowed to power generating units if they follow SLM method. Additional depreciation at the rate of 35% in Andhra Pradesh, Bihar, Telangana or West Bengal Investment in new plant and machinery in notified backward area in Andhra Pradesh, Bihar, Telangana or West Bengal will be qualified for additional depreciation at the rate of 35% (instead of 20%). If however, the new P M is put to use for less than 180 days in the year of acquisition, then additional depreciation will be limited to 17.5% of actual cost in that year. The balance 17.5% will be allowed in the immediately succeeding previous year. The new P M should be acquired and installed during the period beginning on 1-04-2015 and ending on 31-03-2020. The new P M should be acquired for the purpose of setting up an undertaking/ enterprise in the above noted backward area during the period beginning on April 1, 2015 and ending before April 1, 2020.