Vide notification no. 69/2019, Central Board of Direct Taxes (CBDT) has made an amendment to Income tax rules, 1962 and hence made added a new rate of depreciation for vehicles purchased after 23rd August 2019 and before 01st April 2020 and put to use before 01st April 2020.
The amendment has been made in The NEW APPENDIX I, in PART A relating to tangible asset in item III relating to Plant and Machinery which is as under:
(a) for sub-item (2) and entries relating thereto, the following shall be substituted, namely:-.
| Block of Assets | Depreciation allowed as per percentage of written down value |
| “(2) (i) 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 except those covered under entry (ii);
(ii) Motor cars, other than those used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020. |
15%
30% |
(b) in sub-item (3), for paragraph (ii) and entries relating thereto, the following shall be substituted, namely:-
| Block of Assets | Depreciation allowed as per percentage of written down value |
| “(ii) (a) Motor buses, motor lorries and motor taxis used in a business of running them on hire other than those covered under entry (b).
(b) Motor buses, motor lorries and motor taxis used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020.; |
30%
45% |
The above additional depreciation is an after effect of the slow down in motor industry and is connected to the speech of our Finance Minister where she said that millennial today has stopped purchasing car and is travelling in UBER and OLA and that’s why auto industry is going down.
Do you think providing this additional depreciation will boost demand for motor vehicles? Do you think people purchase motor vehicles for depreciation? Also its a point to note that this depreciation will be available for vehicles which are going to be used in a business and businesses don’t use OLA and UBER they purchase their own vehicle and they don’t look for such additional depreciation. Therefore this additional depreciation won’t give any boost to the auto industry as per as opinion of experts at TaxonTips is concerned. However you may enjoy such extra depreciation for new vehicles purchased.
Download Notification: 69/2019
If you need assistance you can ask a question to our expert and get the answer within an hour or post a comment about your views on the post and also subscribe to our newsletter for latest weekly updates.
Comments 1