Accelerated depreciation

[seetha lakshmi]

How to compute? Is this allowable under the Income Tax Act, 1961

[DEV KUMAR KOTHARI]

This is with reference to Issue ID 2046 and 2048. The concept of accelerated depreciation has really been lost significance after the rates of depreciation were reduced in IT Rules from time to time for various assets. In fact the higher rates were also rate of normal depreciation, allowable in normal course. Only because higher rates were prescribed, they were called accelerated deprecation initially. Depreciation is to be claimed as per rates prescribed in IT Rules on WDV basis as you are doing now. In case of computers higher rate of 60% is allowable.

AI Summary

Accelerated depreciation: claim depreciation under prescribed WDV rates; higher prescribed rates no longer create a separate allowance. Depreciation must be computed and claimed in accordance with the rates prescribed under the Income Tax Rules on a Written Down Value basis; historical higher rates labelled as accelerated depreciation did not create a separate allowance and taxpayers may claim only the rule prescribed rates for the applicable asset categories.