TaxTMI 
TaxTMI 
Depreciation
X X X X Extracts X X X X
X X X X Extracts X X X X
....acquired by the assessee after the 28th day of February, 1975 ^7[but before the 1st day of April, 2001], unless it is used- (i) in a business of running it on hire for tourists; or (ii) outside India in his business or profession in another country; and (b) any machinery or plant if the actual cost thereof is allowed as a deduction in one or more years under an agreement entered into by the Central Government under section 42:] ^8[Provided further that where an asset referred to in clause (i) or clause (ii) ^9[or clause (iia)], ^29[or the first proviso to clause (iia)] as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (i) or clause (ii) ^10[or clause (iia)], as the case may be:] ^30[Provided also that where an asset referred to in clause (iia) or the first proviso to clause (iia), as the case may be, is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nchises or any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor and the successor in the case of succession referred to in ^27[clause (xiii), clause (xiiib) and clause (xiv)] of section 47 or section 170 or to the amalgamating company and the amalgamated company in the case of amalgamation, or to the demerged company and the resulting company in the case of demerger, as the case may be, shall not exceed in any previous year the deduction calculated at the prescribed rates as if the succession or the amalgamation or the demerger, as the case may be, had not taken place, and such deduction shall be apportioned between the predecessor and the successor, or the amalgamating company and the amalgamated company, or the demerged company and the resulting company, as the case may be, in the ratio of the number of days for which the assets were used by them.] ^14[Explanation 1.-Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant (other than ships and aircraft) for the purposes of the said undertaking or enterprise during the period beginning on the 1st day of April, 2015 and ending before the 1^st day of April, 2020 in the said backward area, then, the provisions of clause (iia) shall have effect, as if for the words "twenty per cent.", the words "thirty-five per cent." had been substituted.] ^31[Provided further] that no deduction shall be allowed in respect of- (A) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or (B) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or (C) any office appliances or road transport vehicles; or (D) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head "Profits and gains of business or profession" of any one previous year;] ^19[(iii) in the case of any building, machinery, plant or furniture in respect of which ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years.] ******************** NOTES:- 1. Substituted vide Section 9 of the Finance (No. 2) Act, 1998 w.e.f. 01-04-1999 before it was read as, "In respect of depreciation of buildings, machinery, plant or furniture owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall, subject to the provisions of section 34, be allowed-" Earlier, Amended vide Section 11 of the Finance (No. 2) Act, 1996&....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ists;" Earlier, Inserted vide Section 4 of the Finance Act, 1975 w.e.f. 01-04-1975 And was Amended vide Section 5 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 6. Omitted vide Section 7 of the Finance Act, 1995 w.e.f. 01-04-1996 before it was read as, "further" 7. Inserted vide Section 21 of the Finance Act, 2001 w.e.f. 01-04-2002 8. Substituted vide Section 2 of the Income-tax (Amendment) Act, 1998 w.e.f. 01-04-1998 before it was read as, "Provided further that where any asset falling within a block of assets is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this clause in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed under this clause in the case of block of assets comprising such asset :" Earlier, Inserted vide Section 11 of the Finance (No. 2) Act, 1991 w.e.f. 01-04-1992 And was Amended vide Section 7 of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to fifteen per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii): Provided that such further deduction of fifteen per cent shall be allowed to- (A) a new industrial undertaking during any previous year in which such undertaking begins to manufacture or produce any article or thing on or after the 1st day of April, 2002; or (B) any industrial undertaking existing before the 1st day of April, 2002, during any previous year in which it achieves the substantial expansion by way of increase in installed capacity by not less than ten per cent: Provided further that no deduction shall be allowed in respect of- (a) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or (b) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest house; or (c) any office appliances or road transport vehicles; or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... vehicles; and (c) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise( in computing the income chargeable under the head "Profits and gains of business or profession" of any one previous year. Explanation : For the purposes of this clause, - (a) "new machinery or plant" shall have the meaning assigned to it in clause (2) of the Explanation below clause (vi) of this sub-section; (b) "residential accommodation" includes accommodation in the nature of a guest house but does not include premises used as a hotel;" And was Inserted vide Section 14 of the Finance Act, 2002 w.e.f. 01-04-2003 And was Amended vide Section 8 of the Finance (No. 2) Act, 2004 w.e.f. 01-04-2005 19. Inserted vide Section 9 of the Finance (No. 2) Act, 1998 w.e.f. 01-04-1998 Earlier, Amended vide Section 6 of the Finance Act, 1966 w.e.f. 01-04-1966 And was Amended vide Section 8 of the Finance (No. 2) Act, 1967 w.e.f. 01-04-1967 And was Omitted vide Section 5 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es" is ten thousand rupees or less, or where the building is used solely or mainly for the welfare of such persons as a hospital, creche, school, canteen, library, recreational centre, shelter, rest-room or lunch-room, a sum equal to forty per cent. of the actual cost of the building to the assessee in respect of the previous year of erection of the building;" Earlier, Amended vide Section 10 of the Finance Act, 1983 w.e.f. 01-04-1984 And was Amended vide Section 6 of the Finance Act, 1966 w.e.f. 01-04-1966 And was Amended vide Section 7 of the Finance Act, 1976 w.e.f. 01-04-1977 And was Amended vide Section 5 of the Finance Act, 1978 w.e.f. 01-04-1979 22. Omitted vide Section 5 of the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, "(v) in the case of any new building, the erection of which is completed after the 31st day of March, 1967, where the building is owned by an Indian company and used by such company as a hotel and such hotel is for the time being approved in this behalf by the Central Government, a sum equal to twenty-five per cent. of the actual cost o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hall not apply to him for that assessment year and for every subsequent assessment year; so, however, that the assessee may, by notice in writing furnished to the Income-tax Officer before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139, whether fixed originally or on extension, for furnishing the return of income for any such subsequent assessment year, revoke his declaration and upon such revocation, the provisions of this clause shall apply to the assessee for that subsequent assessment year and for every assessment year thereafter: Provided further that no deduction shall be allowed under this clause in respect of- (a) any machinery or plant installed in any office premises or any residential accommodation, including any accommodation in the nature of a guest-house, (b) any ship, aircraft, machinery or plant in respect of which the deduction by way of development rebate is allowable under section 33 and (c) any ship or aircraft acquired after the 1st day of March, 1976, or any machinery or plant installed after that date. Explanation .- For the purposes of this clause,- (1) "new s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n or in relation to, and by way of renovation or extension of, or improvement to, the building, then, in respect of depreciation of such structure or work, the following deductions shall, subject to the provisions of section 34, be allowed- (i) such percentage on the written down value of the structure or work as may in any case or class of cases be prescribed; (ii) in the case of any such structure or work which is sold, discarded, demolished, destroyed or is surrendered as a result of the determination of the lease or other right of occupancy in respect of the building in the previous year (other than the previous year in which it is constructed or done) the amount by which the moneys payable in respect of such structure or work together with the amount of scrap value, if any, fall short of the written down value thereof: Provided that such deficiency is actually written off in the books of the assessee. Explanation. For the purposes of this clause,- (i) "moneys payable", in respect of any structure or work, includes (a) any insurance or compensation moneys payable in respect thereof; (b) where the structure or work i....