RATES OF DEPRECIATION UNDER THE INCOME TAX ACT

APPENDIX I
[See rule 5]
TABLE OF RATES AT WHICH DEPRECIATION IS ADMISSIBLE

Block of assets Depreciation allowance as percentage of written down value
1 2
PART A
TANGIBLE ASSETS

I. BUILDING
1) Buildings which are used mainly for residential purposes except hotels and boarding houses 5
2) Buildings other than those used mainly for residential purposes and not covered by sub-items (1) above and (3) below 10
3) Buildings acquired on or after the 1st day of September, 2002 for installing machinery and plant forming part of water supply project or water treatment system and which is put to use for the purpose of business of providing infrastructure facilities under clause (i) of subsection (4) of section 80-IA 100
4) Purely temporary erections such as wooden structures 100

II. FURNITURE AND FITTINGS
Furniture and fittings including electrical fittings 10

III. MACHINERY AND PLANT
1) Machinery and plant other than those covered by sub-items (2), (3) and (8) below 15
2) Motor cars, other than those used in a business of running them on hire, acquired or put to use on or after the 1st day of April, 1990 15
3) (i) Aeroplanes – Aeroengines 40
(ii) Motor buses, motor lorries and motor taxis used in a business of running them on hire 30
(iii) Commercial vehicle which is acquired by the assessee on or after the 1st day of October, 1998, but before the 1st day of April, 1999 and is put to use for any period before the 1st day of April, 1999 for the purposes of
business or profession in accordance with the third proviso to clause (ii) of sub-section (1) of section 32
40
(iv) New commercial vehicle which is acquired on or after the 1st day of October, 1998, but before the 1st day of April, 1999 in replacement of condemned vehicle of over 15 years of age and is put to use for any period
before the 1st day of April, 1999 for the purposes of business or profession in accordance with the third
proviso to clause (ii) of sub-section (1) of section 32
60
(v) New commercial vehicle which is acquired on or after the 1st day of April, 1999 but before the 1st day of April, 2000 in replacement of condemned vehicle of over 15 years of age and is put to use before the 1st day of April, 2000 for the purposes of business or profession in accordance with the second proviso to clause (ii) of
sub-section (1) of section 32
60
(vi) New commercial vehicle which is acquired on or after the 1st day of April, 2001 but before the 1st day of April, 2002 and is put to use before the 1st day of April, 2002 for the purposes of business or profession 50
(vii) Moulds used in rubber and plastic goods factories 30
(viii) Air pollution control equipment, being –

  • Electrostatic precipitation systems
  • Felt-filter systems
  • Dust collector systems
  • Scrubber-counter current/venturi/packedbed/cyclonic scrubbers
  • Ash handling system and evacuation system
100
(ix) Water pollution control equipment, being -(a) Mechanical screen systems
(b) Aerated detritus chambers (including air compressor)
(c) Mechanically skimmed oil and grease removal systems
(d) Chemical feed systems and flash mixing equipment
(e) Mechanical flocculators and mechanical reactors
(f) Diffused air/mechanically aerated activated sludge systems
(g) Aerated lagoon systems
(h) Biofilters
(i) Methane-recovery anaerobic digester systems
(j) Air floatation systems
(k) Air/steam stripping systems
(l) Urea Hydrolysis systems
(m) Marine outfall systems
(n) Centrifuge for dewatering sludge
(o) Rotating biological contractor or bio-disc
(p) Ion exchange resin column
(q) Activated carbon column
100
(x) (a) Solidwaste, control equipments being, – caustic/lime/chrome/ mineral/cryolite recovery system
(b) Solidwaste recycling and resource recovery systems
100
(xi) Machinery and plant, used in semi-conductor industry covering all integrated circuits (ICs) (excluding hybrid integrated circuits) ranging from small scale integration (SSI) to large scale integration/very large scale integration (LSI/VLSI) as also discrete semi-conductor devices such as diodes, transistors, thyristors, triacs, etc., other than those covered by entries (viii), (ix) and (x) of this sub-item and sub-item (8) below. 30

(xia) Life Saving medical equipment being-(a) D.C.Defibrillators for internal use and pace makers.(b) Haemodialysors.

(c) Heart lung machine.

(d) Cobalt therapy unit.

(e) Colour Doppler.

(f) Spect Gamma Camera.

(g) Vascular Angiography System including Digital subtraction Angiography.

(h) Ventilator used with anaesthesia apparatus.

(i) Magnetic Resonance Imaging System

(j) Surgical Laser.

(k) Ventilator other than those used with anaesthesia

(l) Gamma knife.

(m) Bone Marrow Transplant Equipment including silastic long standing intravenous catheters for chemotherapy.

(n) Fibreoptic endoscopes including Paediatric resectoscope/audit resectoscope Peritoneoscopes, Arthoscope, Microaryngoscope, Fibresoptic Flexible Nasal Pharyngo, Video Laryngo Bronchoscope, fibreoptic Flaxible Laryngo Bronchoscope, Video Laryngo Bronchoscope and Video Oescophago Gastroscope, Stroboscope, Fibreoptic Flexible oesophago Gastroscope.

(o) Laparoscope (single incision )

40
4) Containers made of glass or plastic used as re-fills 50
5) Computers including computer software 60
6) Machinery and plant, used in weaving, processing and garment sector of textile industry, which is purchased under TUFS on or after the 1st day of April, 2001 but before the 1st day of April, 2004 and is put to use before the 1st day of April, 2004 50
7) Machinery and plant, acquired and installed on or after the 1st day of September, 2002 in a water supply project or a water treatment system and which is put to use for the purpose of business of providing infrastructure facility under clause (i) of sub-section (4) of section 80-IA 100
8) (i) Wooden parts used in artificial silk manufacturing machinery 100
(ii) Cinematograph films – bulbs of studio lights 100
(iii) Match factories – Wooden match frames 100
(iv) Mines and quarries:(a) Tubs, winding ropes, haulage ropes and sand stowing pipes
(b) Safety lamps
100
(v) Salt works – Salt pans, reservoirs and condensers, etc., made of earthy, sandy or clayey material or any other similar material 100
(vi) Flour mills – Rollers 80
(vii) Iron and steel industry – Rolling mill rolls 80
(viii) Sugar works – Rollers 80

(ix) Energy saving devices, being-A. Specialised boilers and furnaces:(a) Ignifluid/fluidized bed boilers

(b) Flameless furnaces and continuous pusher type furnaces

(c) Fluidized bed type heat treatment furnaces

(d) High efficiency boilers (thermal efficiency higher than75 per
cent in case of coal fired and 80 per cent in case of oil/gas
fired boilers)

80
B. Instrumentation and monitoring system for monitoring energy
flows:(a) Automatic electrical load monitoring systems(b) Digital heat loss meters

(c) Micro-processor based control systems

(d) Infra-red thermography

(e) Meters for measuring heat losses, furnace oil flow, steam flow, electric

energy and power factor meters

(f) Maximum demand indicator and clamp on power meters

(g) Exhaust gases analyser

(h) Fuel oil pump test bench

80

C. Waste heat recovery equipment:(a) Economisers and feed water heaters(b) Recuperators and air pre-heaters

(c) Heat pumps

(d) Thermal energy wheel for high and low temperature waste
heat recovery

80
D. Co-generation systems:(a) Back pressure pass out, controlled extraction, extractioncum-
condensing turbines for co-generation along with pressure boilers(b) Vapour absorption refrigeration systems

(c) Organic rankine cycle power systems

(d) Low inlet pressure small steam turbines

80
E. Electrical equipment:(a) Shunt capacitors and synchronous condenser systems(b) Automatic power cut off devices (relays) mounted on individual motors(c) Automatic voltage controller(d) Power factor controller for AC motors(e) Solid state devices for controlling motor speeds(f) Thermally energy-efficient stenters (which require 800 or less
kilocalories of heat to evaporate one kilogram of water)

(g) Series compensation equipment
(h) Flexible AC Transmission (FACT) devices – Thyristor controlled
series compensation equipment

(i) Time of Day (TOD) energy meters

(j) Equipment to establish transmission highways for National
Power Grid to facilitate transfer of surplus power of one
region to the deficient region

(k) Remote terminal units/intelligent electronic devices,
computer hardware/software, router/bridges, other required
equipment and associated communication systems for
supervisory control and data acquisition systems, energy
management systems and distribution management systems
for power transmission systems

(l) Special energy meters for Availability Based Tariff (ABT)

80
F. Burners:
(a) 0 to 10 per cent excess air burners
(b) Emulsion burners(c) Burners using air with high pre-heat temperature (above 300°C)
80
G. Other equipment:(a) Wet air oxidation equipment for recovery of chemicals and
heat(b) Mechanical vapour recompressors(c) Thin film evaporators(d) Automatic micro-processor based load demand controllers(e) Coal based producer gas plants(f) Fluid drives and fluid couplings(g) Turbo charges/super-charges(h) Sealed radiation sources for radiation processing plants
80
(x) Gas cylinders including valves and regulators 60
(xi) Glass manufacturing concerns – Direct fire glass melting furnaces 60
(xii) Mineral oil concerns:(a) Plant used in field operations (above ground) distribution –
Returnable packages(b) Plant used in field operations (below ground), but not
including kerbside pumps including under ground tanks and
fittings used in field operations (distribution) by mineral oil
concerns
60
(xiii) Renewal energy devices being -(a) Flat plate solar collectors(b) Concentrating and pipe type solar collectors(c) Solar cookers(d) Solar water heaters and systems(e) Air/gas/fluid heating systems(f) Solar crop drivers and systems

(g) Solar refrigeration, cold storages and air conditioning systems

(h) Solar steels and desalination systems

(i) Solar power generating systems

(j) Solar pumps based on solar-thermal and solar-photovoltaic conversion

(k) Solar-photovoltaic modules and panels for water pumping
and other applications

(l) Wind mills and any specially designed devices which run on wind mills installed on or after 1st day of April, 2014

(m) Any special devices including electric generators and pumps running on wind energy installed on or after 1st day of April, 2014

(n) Biogas-plant and biogas-engines

(o) Electrically operated vehicles including battery powered or
fuel-cell powered vehicles

(p) Agricultural and municipal waste conversion devices producing energy

(q) Equipment for utilising ocean waste and thermal energy

(r) Machinery and plant used in the manufacture of any of the
above sub-items.

80
9) i) Books owned by assessees carrying on a profession –
(a) Books, being annual publications
(b) Books, other than those covered by entry (a) above
10060
ii) Books owned by assessees carrying on business in running lending libraries 100
IV. SHIPS
1) Ocean-going ships including dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes and fishing vessels with wooden hull 20
2) Vessels ordinarily operating on inland waters, not covered by sub-item (3) below 20
3) Vessels ordinarily operating on inland waters being speed boats 20

PART B
INTANGIBLE ASSETS
Know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature 25

 

Notes:

1. “Buildings” include roads, bridges, culverts, wells and tubewells.

2. A building shall be deemed to be a building used mainly for residential purposes, if the built-up floor area thereof used for residential purposes is not less than sixty-six and two-third per cent of its total built up floor area and shall include any such building in the factory premises.

3. In respect of any structure or work by way of renovation or improvement in or in relation to a building referred to in Explanation 1 of clause (ii) of sub-section (1) of section 32, the percentage to be applied will be the percentage specified against sub-item (1) or (2) of item I as may be appropriate to the class of building in or in relation to which the renovation or improvement is effected. Where the structure is constructed or the work is done by way of extension of any such building, the percentage to be applied would be such percentage as would be appropriate, as if the structure or work constituted a separate building.

4. Water treatment system includes system for desalinisation, demineralisation and purification of water.

5. “Electrical fittings” include electrical wiring, switches, sockets, other fittings and fans, etc.

6. “Commercial vehicle” means “heavy goods vehicle”, “heavy passenger motor vehicle”, “light motor vehicle”, “medium goods vehicle” and “medium passenger motor vehicle” but does not include “maxi-cab”, “motor-cab”, “tractor” and “road-roller”. The expressions “heavy goods vehicle”, “heavy passenger motor vehicle”, “light motor vehicle”, “medium goods vehicle”, “medium passenger motor vehicle”, “maxi-cab”, “motor-cab”, “tractor” and “roadroller” shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988).

7. “Computer software” means any computer programme recorded on any disc, tape, perforated media or other information storage device.

8. “TUFS” means Technology Upgradation Fund Scheme announced by the Government of Indiain the form of a Resolution of the Ministry of Textiles vide No.28/1/99-CTI of 31.3.1999.

9. Machinery and plant includes pipes needed for delivery from the source of supply of raw water to the plant and from the plant to the storage facility.

10. “Speed boat” means a motor boat driven by a high speed internal combustion engine capable of propelling the boat at a speed exceeding 24 kilometres 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.’

 

RATES OF DEPRECIATION UNDER COMPANIES ACT
PART ‘A’
1. Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount of an asset is the cost of an asset or other amount substituted for cost, less its residual value. The useful life of an asset is the period over which an asset is expected to be available for use by an entity, or the number of production or similar units expected to be obtained from the asset by the entity
2. For the purpose of this Schedule, the term depreciation includes amortisation.
3. Without prejudice to the foregoing provisions of paragraph 1,—
1 & 1A[(i) The useful life of an asset shall not ordinarily be different from the useful life specified in Part C and the residual value of an asset shall not be more than five per cent. of the original cost of the asset:
Provided that where a company adopts a useful life different from what is specified in Part C or uses a residual value different from the limit specified above, the financial statements shall disclose such difference and provide justification in this behalf duly supported by technical advice”;]
“(ii) 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 follows:-
(a) Mode of amortisation
Amortisation Rate = Amortisation Amount
————————————–
x 100
Cost of Intangible Assets (A)
Amortisation Amount =
Cost of Intangible Assets (A) x Actual Revenue for the year (B)
———————————————————
Projected Revenue from Intangible Asset
(till the end of the concession period) (C)<
(b) Meaning of particulars are as follows :-
Cost of Intangible Assets (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 Assets as provided to the project lender at the time of financial closure / agreement.
The amortisation amount or rate should ensure that the whole of the cost of the intangible asset is amortised over the concession period.
Revenue shall be reviewed at the end of each financial year and projected revenue shall be adjusted to reflect such changes, if any, in the estimates as will lead to the actual collection at the end of the concession period.
c) Example:-
Cost of creation of Intangible Assets : Rs. 500/- Crores
Total period of Agreement : 20 Years
Time used for creation of Intangible Assets : 2 Years
Intangible Assets to be amortised in : 18 Years

Assuming that the Total revenue to be generated out of Intangible Assets over the period would be Rs. 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 Rs. 4.16 Crore (approximately) (i.e. Rs. 5/Rs. 600 x Rs. 500 Crores) which would be charged to profit and loss and 0.83% (i.e. Rs. 4.16 Crore/ Rs. 500 Crore x 100) is the amortisation rate for the first year.
Where a company arrives at the amortisation amount in respect of the said Intangible Assets in accordance with any method as per the applicable Accounting Standards, it shall disclose the same.]
PART ‘B’
4. The useful life or residual value of any specific asset, as notified for accounting purposes by a Regulatory Authority constituted under an Act of Parliament or by the Central Government shall be applied in calculating the depreciation to be provided for such asset irrespective of the requirements of this Schedule.
Depreciation Rate Chart
as per Part “C” of Schedule II of The Companies Act 2013
Nature of assets Useful Life
I. Buildings [NESD]
(a) Buildings (other than factory buildings) RCC Frame Structure 60 Years
(b) Buildings (other than factory buildings) other than RCC Frame Structure 30 Years
(c) Factory buildings 30 Year
(d) Fences, wells, tube wells 5 Years
(e) Others (including temporary structure, etc.) 3 Years
II. Bridges, culverts, bunders, etc. [NESD] 30 Years
III. Roads [NESD]
(a) Carpeted roads
(i) Carpeted Roads-RCC 10 Years
(ii) Carpeted Roads-other than RCC 5 Years
(b) Non-carpeted roads 3 Years
IV. Plant and Machinery
(i) General rate applicable to plant and machinery not covered under special plant and machinery
(a) Plant and Machinery other than continuous process plant not covered under specific industries 15 Years
2[(b) continuous process plant for which no special rate has been prescribed under (ii) below [NESD]] 25 Years
(ii) Special Plant and Machinery
(a) Plant and Machinery related to production and exhibition of Motion Picture Films
1. 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 except bulbs 13 Years
2. Projecting equipment for exhibition of films 13 Year
(b) Plant and Machinery used in glass manufacturing
1. Plant and Machinery except direct fire glass melting furnaces — Recuperative and regenerative glass melting furnaces 13 Years
2. Plant and Machinery except direct fire glass melting furnaces — Moulds [NESD] 8 Years
3. Float Glass Melting Furnaces [NESD] 10 Years
(c) Plant and Machinery used in mines and quarries—Portable underground machinery and earth moving machinery used in open cast mining [NESD] 8 Years
(d) Plant and Machinery used in Telecommunications [NESD]
1. Towers 18 Years
2. Telecom transceivers, switching centres, transmission and other network equipment 13 Years
3. Telecom—Ducts, Cables and optical fibre 18 Years
4. Satellites 18 Years
(e) Plant and Machinery used in exploration, production and refining oil and gas [NESD]
1. Refineries 25 Years
2. Oil and gas assets (including wells), processing plant and facilities 25 Years
3. Petrochemical Plant 25 Years
4. Storage tanks and related equipment 25 Years
5. Pipelines 30 Years
6. Drilling Rig 30 Years
7. Field operations (above ground) Portable boilers, drilling tools, well-head tanks, etc. 8 Years
8. Loggers 8 Years
(f) Plant and Machinery used in generation, transmission and distribution of power [NESD]
1. Thermal/ Gas/ Combined Cycle Power Generation Plant 40 Years
2. Hydro Power Generation Plant 40 Years
3. Nuclear Power Generation Plant 40 Years
4. Transmission lines, cables and other network assets 40 Years
5. Wind Power Generation Plant 22 Years
6. Electric Distribution Plant 35 Years
7. Gas Storage and Distribution Plant 30 Years
8. Water Distribution Plant including pipelines 30 Years
(g) Plant and Machinery used in manufacture of steel
1. Sinter Plant 20 Years
2. Blast Furnace 20 Years
3. Coke ovens 20 Years
4. Rolling mill in steel plant 20 Years
5. Basic oxygen Furnace Converter 25 Years
(h) Plant and Machinery used in manufacture of non-ferrous metals
1. Metal pot line [NESD] 40 Years
2. Bauxite crushing and grinding section [NESD] 40 Years
3. Digester Section [NESD] 40 Years
4. Turbine [NESD] 40 Years
5. Equipments for Calcination [NESD] 40 Years
6. Copper Smelter [NESD] 40 Years
7. Roll Grinder 40 Years
8. Soaking Pit 30 Years
9. Annealing Furnace 30 Years
10. Rolling Mills 30 Years
11. Equipments for Scalping, Slitting , etc. [NESD] 30 Years
12. Surface Miner, Ripper Dozer, etc., used in mines 25 Years
13. Copper refining plant [NESD] 25 Years
(i) Plant and Machinery used in medical and surgical operations [NESD]
1. Electrical Machinery, X-ray and electrotherapeutic apparatus and accessories thereto, medical, diagnostic equipments, namely, Cat-scan, Ultrasound Machines, ECG Monitors, etc. 13 Years
2. Other Equipments 15 Years
(j) Plant and Machinery used in manufacture of pharmaceuticals and chemicals [NESD]
1. Reactors 20 Years
2. Distillation Columns 20 Years
3. Drying equipments/Centrifuges and Decanters 20 Years
4. Vessel/storage tanks 20 Years
(k) Plant and Machinery used in civil construction
1. Concreting, Crushing, Piling Equipments and Road Making Equipments 12 Years
2. Heavy Lift Equipments—
Cranes with capacity of more than 100 tons 20 Years
Cranes with capacity of less than 100 tons 15 Years
3. Transmission line, Tunneling Equipments [NESD] 10 Years
4. Earth-moving equipments 9 Years
5. Others including Material Handling /Pipeline/Welding Equipments [NESD] 12 Years
(l) Plant and Machinery used in salt works [NESD] 15 Years
V. Furniture and fittings [NESD]
(i) General furniture and fittings 10 Years
(ii) 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 furniture and fittings let out on hire for use on the occasion of marriages and similar functions. 8 Years
VI. Motor Vehicles [NESD]
1. Motor cycles, scooters and other mopeds 10 Years
2. Motor buses, motor lorries, motor cars and motor taxies used in a business of running them on hire 6 Years
3. Motor buses, motor lorries and motor cars other than those used in a business of running them on hire 8 Years
4. Motor tractors, harvesting combines and heavy vehicles 8 Years
5. Electrically operated vehicles including battery powered or fuel cell powered vehicles 8 Years
VII. Ships [NESD]
1. Ocean-going ships
(i) Bulk Carriers and liner vessels 25 Years
(ii) Crude tankers, product carriers and easy chemical carriers with or without conventional tank coatings. 20 Years
(iii) Chemicals and Acid Carriers:
(a) With Stainless steel tanks 25 Years
(b) With other tanks 20 Years
(iv) Liquified gas carriers 30 Years
(v) Conventional large passenger vessels which are used for cruise purpose also 30 Years
(vi) Coastal service ships of all categories 30 Years
(vii) Offshore supply and support vessels 20 Years
(viii) Catamarans and other high speed passenger for ships or boats 20 Years
(ix) Drill ships 25 Years
(x) Hovercrafts 15 Years
(xi) Fishing vessels with wooden hull 10 Years
(xii) Dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes 14 Years
2. Vessels ordinarily operating on inland waters—
(i) Speed boats 13 Years
(ii) Other vessels 28 Years
VIII. Aircrafts or Helicopters [NESD] 20 Years
IX. Railways sidings, locomotives, rolling stocks, tramways and railways used by concerns, excluding railway concerns [NESD] 15 Years
X. Ropeway structures [NESD] 15 Years
XI. Office equipment [NESD] 5 Years
XII. Computers and data processing units [NESD]
(i) Servers and networks 6 Years
(ii) End user devices, such as, desktops, laptops, etc. 3 Years
XIII. Laboratory equipment [NESD]
(i) General laboratory equipment 10 Yeras
(ii) Laboratory equipments used in educational institutions 5 Years
XIV. Electrical Installations and Equipment [NESD] 10 Years
XV. Hydraulic works, pipelines and sluices [NESD] 15 Years
Notes :
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[4(a) Useful life specified in part C of the schedule is for whole of the asset and 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.
(b) The requirement under sub-paragraph (a) shall be voluntary in respect of the financial year commencing on or after the 1st April, 2014 and mandatory for financial statements in respect of financial years commencing on or after the 1st April, 2015]
3[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 in significant 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—
(a) shall be depreciated over the remaining useful life of the asset as per this Schedule;
(b) after retaining the residual value, 5[may be recognized] in the opening balance of retained earnings where the remaining useful life of an asset is nil.
8. ‘‘Continuous process plant’’ means a plant which is required and designed to operate for twenty-four hours a day.