Depreciation Calculator for Companies Act 2013
Depreciation as per companies act 2013 for Financial year 2014-15 and thereafter. These provisions are applicable from 01.04.2014 vide notification dated 27.03.2014.
- Depreciation is calculated by considering useful life of asset, cost and residual value.
- Any method WDV or SLM can be used.
- Schedule – II contains a list of useful life according to class of assets and the residual value shall not be more than five percent of the original cost of asset.
However companies are free to adopt a useful life different from what specified in Schedule II and residual value more than 5%. The financial statements shall disclose such difference and provide justification in this behalf duly supported by technical advice. - If there is any addition to the asset or asset is sold, discarded, demolished or destroyed then the calculation is made according to the date of such event. In other words, if any asset is purchased or sold then the calculation will be made according to the date of purchase or sold i.e datewise calculation is made.
- Depreciation method used is to be shown in accounts
- Useful life of assets is to be disclosed only when it is taken different from Schedule – II
- For assets in which NESD (No Exta Shift Depreciation) is mentioned in Schedule – II, the depreciation remains same irrespective of the no. of work shifts.
- For other assets, if the asset is used for double shifts during any time of the year then the depreciation shall be increased by 50% for that period. Similarly if asset is used for triple shifts then depreciation shall be increased by 100% for that period.
- Each Part of an item of an asset with a cost significant in relation to the total cost of the item shall be depreciated separately. Where cost of the part 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 should be determined separately.
As per the amendment dated August 29, 2014 notified by the MCA, the said requirement shall be voluntary in respect for the financial year commencing on or after the April 1, 2104 and mandatory for financial statements in respect of financial years commencing on or after April 1, 2015.
Component accounting is required to be done for the entire block of assets as at 1 April 2014 if a company opts to follow it voluntarily and as at 1 April, 2015 mandatorily. It cannot be restricted to only new assets acquired after 1 April 2014 or 1 April, 2015 as the case may be.
If residual value is taken as 5% of cost of asset and life as per schedule – II then the depreciation rates on SLM and WDV basis are given in following link.
Depreciation Calculator for Companies Act 2013
Transitional Provision
For assets existing on 01.04.2014 date of purchase is considered and the balance sheet value has to be depreciated over remaining useful life of assets.
If the remaining useful life of asset is NIL then the amount over and above residual value may be recognized in the opening balance of retained earnings or may be charged off to Profit and Loss account.
if a company uses Written Down Value (WDV) method of depreciation, it will need to calculate a new rate for depreciation to depreciate the asset over their remaining useful life using the formula for calculation of rate for depreciation as per WDV method which is reproduced below –
R= {1 – (s/c)^1/n } x 100
Where R = Rate of Depreciation (in %)
n = Remaining useful life of the asset (in years)
s = Scrap value at the end of useful life of the asset
c= Cost of the asset/Written down value of the asset
It may be noted that upon transition to Schedule II, the company may have different rates of depreciation for individual assets within the same class in case of existing assets as there will be a different remaining useful life for each asset.
Depreciation rates as per Companies Act
Depreciation as per new companies act is allowed on the basis of useful life of assets and residual value. Depreciation rates are not given under the new companies act.
A table is given below of depreciation rates applicable if the asset is purchased on or after 01st April, 2014 and useful life is considered as given in companies act,2013 and residual value as 5%. For all other cases calculate depreciation rate using our depreciation calculator.
Also Read:
Deferred Tax Asset and Deferred Tax Liability
NESD stands for No Extra Shift Depreciation.
| Nature of Assets | Useful Life | Rate [SLM] | Rate [WDV] |
| (I) Buildings [NESD] | |||
| (a) Building (other than factory buildings) RCC Frame Structure | 60 | 1.58% | 4.87% |
| (b) Building (other than factory buildings) other than RCC Frame Structure | 30 | 3.17% | 9.50% |
| (c) Factory buildings | 30 | 3.17% | 9.50% |
| (d) Fences, wells, tube wells | 5 | 19.00% | 45.07% |
| (e) Other (including temporary structure, etc.) | 3 | 31.67% | 63.16% |
| (II) Bridges, culverts, bunkers, etc. [NESD] | 30 | 3.17% | 9.50% |
| (III) Roads [NESD] | |||
| (a) Carpeted Roads | |||
| (i) Carpeted Roads – RCC | 10 | 9.50% | 25.89% |
| (ii) Carpeted Roads – other than RCC | 5 | 19.00% | 45.07% |
| (b) Non-carpeted roads | 3 | 31.67% | 63.16% |
| (IV) Plant and Machinery | |||
| (a) General rate applicable to Plant and Machinery not covered under Special Plant and Machinery | |||
| (i) Plant and Machinery other than continuous process plant not covered under specific | 15 | 6.33% | 18.10% |
| (ii) Continuous process plant for which no special rate has been prescribed under (ii) below | 8 | 11.88% | 31.23% |
| (b) Special Plant and Machinery | |||
| (i) 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 | 13 | 7.31% | 20.58% |
| 2 Projecting equipment for exhibition of films | 13 | 7.31% | 20.58% |
| (ii) Plant and Machinery used in glass | |||
| 1 Plant and Machinery except direct fire glass melting furnaces – Recuperative and regenerative glass melting furnaces | 13 | 7.31% | 20.58% |
| 2 Plant and Machinery except direct fire glass melting furnaces – Moulds [NESD] | 8 | 11.88% | 31.23% |
| 3 Float Glass Melting Furnaces [NESD] | 10 | 9.50% | 25.89% |
| (iii) Plant and Machinery used in mines and quarries Portable underground machinery and earth moving machinery used in open cast mining | 8 | 11.88% | 31.23% |
| (iv) Plant and Machinery used in Telecommunications [NESD] | |||
| 1 Towers | 18 | 5.28% | 15.33% |
| 2 Telecom transceivers, switching centres, transmission and other network equipment | 13 | 7.31% | 20.58% |
| 3 Telecom – Ducts, Cables and optical fibre | 18 | 5.28% | 15.33% |
| 4 Satellites | 18 | 5.28% | 15.33% |
| (v) Plant and Machinery used in exploration, production and refining oil and gas [NESD] | |||
| 1 Refineries | 25 | 3.80% | 11.29% |
| 2 Oil and gas assets (including wells), processing plant and facilities | 25 | 3.80% | 11.29% |
| 3 Petrochemical Plant | 25 | 3.80% | 11.29% |
| 4 Storage tanks and related equipment | 25 | 3.80% | 11.29% |
| 5 Pipelines | 30 | 3.17% | 9.50% |
| 6 Drilling Rig | 30 | 3.17% | 9.50% |
| 7 Field operations (above ground) Portable boilers, drilling tools, well-head tanks, etc. | 8 | 11.88% | 31.23% |
| 8 Loggers | 8 | 11.88% | 31.23% |
| (vi) Plant and Machinery used in generation, transmission and distribution of power [NESD] | |||
| 1 Thermal / Gas / Combined Cycle Power Generation Plant | 40 | 2.38% | 7.22% |
| 2 Hydro Power Generation Plant | 40 | 2.38% | 7.22% |
| 3 Nuclear Power Generation Plant | 40 | 2.38% | 7.22% |
| 4 Transmission lines, cables and other network assets | 40 | 2.38% | 7.22% |
| 5 Wind Power Generation Plant | 22 | 4.32% | 12.73% |
| 6 Electric Distribution Plant | 35 | 2.71% | 8.20% |
| 7 Gas Storage and Distribution Plant | 30 | 3.17% | 9.50% |
| 8 Water Distribution Plant including pipelines | 30 | 3.17% | 9.50% |
| (vii) Plant and Machinery used in manufacture of | |||
| 1 Sinter Plant | 20 | 4.75% | 13.91% |
| 2 Blast Furnace | 20 | 4.75% | 13.91% |
| 3 Coke Ovens | 20 | 4.75% | 13.91% |
| 4 Rolling mill in steel plant | 20 | 4.75% | 13.91% |
| 5 Basic Oxygen Furnace Converter | 25 | 3.80% | 11.29% |
| (viii) Plant and Machinery used in manufacture of non ferrous metals | |||
| 1 Metal pot line [NESD] | 40 | 2.38% | 7.22% |
| 2 Bauxite crushing and grinding section | 40 | 2.38% | 7.22% |
| 3 Digester Section [NESD] | 40 | 2.38% | 7.22% |
| 4 Turbine [NESD] | 40 | 2.38% | 7.22% |
| 5 Equipments for Calcinations [NESD] | 40 | 2.38% | 7.22% |
| 6 Copper Smelter [NESD] | 40 | 2.38% | 7.22% |
| 7 Roll Grinder | 40 | 2.38% | 7.22% |
| 8 Soaking Pit | 30 | 3.17% | 9.50% |
| 9 Annealing Furnace | 30 | 3.17% | 9.50% |
| 10 Rolling Mills | 30 | 3.17% | 9.50% |
| 11 Equipments for Scalping, Slitting, etc. [NSED] | 30 | 3.17% | 9.50% |
| 12 Surface Miner, Ripper Dozer, etc. used in mines | 25 | 3.80% | 11.29% |
| 13 Copper refining plant [NSED] | 25 | 3.80% | 11.29% |
| (ix) 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 | 7.31% | 20.58% |
| 2 Other Equipments | 15 | 6.33% | 18.10% |
| (x) Plant and Machinery used in manufacture of pharmaceuticals and chemicals [NESD] | |||
| 1 Reactors | 20 | 4.75% | 13.91% |
| 2 Distillation Columns | 20 | 4.75% | 13.91% |
| 3 Drying equipments / Centrifuges and Decanters | 20 | 4.75% | 13.91% |
| 4 Vessel / Storage tanks | 20 | 4.75% | 13.91% |
| (xi) Plant and Machinery used in civil construction | |||
| 1 Concreting, Crushing, Piling Equipments and Road Making Equipments | 12 | 7.92% | 22.09% |
| 2 Heavy Lift Equipments – | |||
| – Cranes with capacity more than 100 tons | 20 | 4.75% | 13.91% |
| – Cranes with capacity less than 100 tons | 15 | 6.33% | 18.10% |
| 3 Transmission line, Tunnelling Equipments [NESD] | 10 | 9.50% | 25.89% |
| 4 Earth-moving equipments | 9 | 10.56% | 28.31% |
| 5 Others including Material Handling / Pipeline / Welding Equipments [NESD] | 12 | 7.92% | 22.09% |
| (xii) Plant and Machinery used in salt works [NESD] | 15 | 6.33% | 18.10% |
| (V) Furniture and fittings [NESD] | |||
| (a) General furniture and fittings | 10 | 9.50% | 25.89% |
| (b) 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 | 8 | 11.88% | 31.23% |
| (VI) Motor Vehicles [NESD] | |||
| (a) Motor cycles, scooters and other mopeds | 10 | 9.50% | 25.89% |
| (b) Motor buses, motor lorries, motor cars and motor taxies used in a business of running them on hire | 6 | 15.83% | 39.30% |
| (c) Motor buses, motor lorries, motor cars and motor taxies other than those used in a business of running them on | 8 | 11.88% | 31.23% |
| (d) Motor tractors, harvesting combines and heavy vehicles | 8 | 11.88% | 31.23% |
| (e) Electrically operated vehicles | 8 | 11.88% | 31.23% |
| (VII) Ships [NESD] | |||
| (a) Ocean-going ships | |||
| (i) Bulk Carriers and liner vessels | 25 | 3.80% | 11.29% |
| (ii) Crude tankers, product carriers and easy chemical carriers with or without conventional | 20 | 4.75% | 13.91% |
| (iii) Chemicals and Acid Carriers | |||
| 1 With Stainless steel tanks | 25 | 3.80% | 11.29% |
| 2 With other tanks | 20 | 4.75% | 13.91% |
| (iv) Liquefied gas carriers | 30 | 3.17% | 9.50% |
| (v) Conventional large passenger vessels which are used for cruise purpose also | 30 | 3.17% | 9.50% |
| (vi) Coastal service ships of all categories | 30 | 3.17% | 9.50% |
| (vii) Offshore supply and support vessels | 20 | 4.75% | 13.91% |
| (viii) Catamarans and other high speed passenger for ships or boats | 20 | 4.75% | 13.91% |
| (ix) Drill ships | 25 | 3.80% | 11.29% |
| (x) Hovercrafts | 15 | 6.33% | 18.10% |
| (xi) Fishing vessels with wooden hull | 10 | 9.50% | 25.89% |
| (xii) Dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging | 14 | 6.79% | 19.26% |
| (b) Vessels ordinarily operating on inland waters | |||
| (i) Speed boats | 13 | 7.31% | 20.58% |
| (ii) Other vessels | 28 | 3.39% | 10.15% |
| (VIII) Aircrafts or Helicopters [NESD] | 20 | 4.75% | 13.91% |
| (IX) Railway siding, locomotives, rolling stocks, tramways and railway used by concerns, excluding railway | 15 | 6.33% | 18.10% |
| (X) Ropeway structures [NESD] | 15 | 6.33% | 18.10% |
| (XI) Office equipments [NESD] | 5 | 19.00% | 45.07% |
| (XII) Computers and data processing units [NESD] | |||
| (a) Servers and networks | 6 | 15.83% | 39.30% |
| (b) End user devices, such as, desktops, laptops, etc. | 3 | 31.67% | 63.16% |
| (XIII) Laboratory equipment [NESD] | |||
| (a) General laboratory equipment | 10 | 9.50% | 25.89% |
| (b) Laboratory equipments used in education institutions | 5 | 19.00% | 45.07% |
| (XIV) Electrical Installations and Equipment [NESD] | 10 | 9.50% | 25.89% |
| (XV) Hydraulic woks, pipelines and sluices [NESD] | 15 | 6.33% | 18.10% |
Also Read:
Depreciation rates as per Income Tax For F.y 2019-20 & 2020-21
Input Tax Credit under GST
