Concept of Block of Assets

There is concept of block of assets, all assets of same type treated as one Block and depreciation on them calculated together.

 

Different Block of Assets and their Rates of Depreciation are

  1. Building(5% Residential,10% Commercial,100% Temporary or for Developing Infrastructure)
  2. Furniture & Fittings 10%(It includes Electrical Fittings also)
  3. Intangible Assets 25%(Patents/Trademarks/Know how/Patent/License)
  4. Plant and Machinery (15%,30%,40%,80%,100%),

Plant and Machinery includes

  • Motor Cars on Hire 30%  (45%, If purchase in between 23rd Aug 2019 to 31st March 2020)
  • Motor Cars(Others) 15%  (30%, If purchase in between 23rd Aug 2019 to 31st March 2020)
  • Computers 40%
  • Books Annual Publications/Library Business 100%
  • Books (Others) 60%
  • Rollers/Rolling Mills 80%
  • Pollution Control Equipment 100%

 

General Rate on plant and machinery is 15%

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New Amendment

 

Depreciation @ 80% to be charged on 

  • Windmills and Any other Specialized devices which run on wind mills
  • Any special devices including electric generators and pumps running on wind energy

if they are INSTALLED ON OR AFTER 1.4.2018

(If installed before that period,then Depreciation Rate applicable is 15%)

 

 DOWNLOAD AND TRY

Q1 

In 2018-19  Company purchased  the following assets

Asset Name

Purchase Amt

Date of Purchase Dep Rate
Machine 1 500000 14-Apr 15%
Furniture 20000 15-Aug 10%
Car 300000 25-Dec 15%
Machine 2 40000 26-Jan 15%

How Many Block of Assets

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Compute Depreciation in 2018-19

View Answer

 

Q2  

Continuing previous question,Suppose in 2019-20,Following Assets Were Purchased

Name of Asset Amount Date of Purchase Depreciation Rate
Furniture 75000 20-Apr 10%
Computer 50000 15-Nov 40%

 Now how many block of Assets

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Compute Depreciation in 2020-21

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SALE OF ASSETS

In this Case,

If all the assets in a Block Sold

Block Cease to Exist.Hence No Depreciation Charged.Short Term Capital Gain/ Loss Computed

 

If Some Assets Exist in Block,

Depreciation is Computed on Remaining Value(Opening+Purchase-Sales) if any.NO Capital Gain/Loss is Computed

 

Q3 Continuing previous question,Suppose in 2019-20,Car and Machine 1 Sold for 200000 and 350000 respectively 

 

View Answer
  1. Income Tax
  2. PGBP Income

About the Author

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.