Provision - Accelerated depreciation, Income Tax

[ASHISH TIWARI]

Income Tax Act, 1961. provides for the rate of depreciation i.e. 80% on Renewable Energy distribution devices.However the Central Electricity Regulatory Commission tariff determination guidilines provides for the different tariff rates i.e. Rs. 18 -in case assessee avails normal depriciation & Rs. 17 in case assessee avails the accelerated depriciation benefits of Income Tax. My querries are 1) whether there is any other provision under the Income Tax Act which deals with accelerated depriciation? 2)In case the rate is 80% only than what is accelerated depriciation.

Posts / Replies

[DEV KUMAR KOTHARI]

80% depreciation can be called as incentive rate or accellerated rate. This is applicable to all assessees who use prescribed assets for busienss. For power generating and/ or distribution companies there is also another Appendix 1A to IT Rules. It is optional on such companies to adopt rates on WDV as per Appendix 1 or on SLM basis (on cost)as per Appendix 1A to IT Rules. Please refer again section 32 again and Rules 5(1A) and Appendix IA. In case I am missing some aspects, please discuss the same in this forum.