Rates of depreciation
(for income-tax)
Block of assets Depreciation allowance as percentage of written down value
PART A
TANGIBLE ASSETS
I. BUILDING 10
II. FURNITURE AND FITTINGS 10
III. MACHINERY AND PLANT
(1) Machinery and plant other than those covered by below 15
(2) Motor cars, other than those used in a business of running them on hire 15
(3) (i) Motor buses, motor lorries and motor taxis used in a business of running them on hire 30
(3) (ii) Moulds used in rubber and plastic goods factories 30
(4) Containers made of glass or plastic used as re-fills 40
(5) Computers including computer software 40
PART B
INTANGIBLE ASSETS
Know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature 25

Depreciation expense helps companies to generate tax savings. Tax rules allow depreciation expense be used as tax reduction against revenue in arriving at taxable income. The higher the depreciation expense, the lower the taxable income and, thus, the more the tax savings.

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