Income Tax Act - Vineet Kapoor & Associates - Indian CA, Indian CPA, Chartered Accountants

New Delhi, the 27th September, 2002

NOTIFICATION
INCOME-TAX

S.O. 1046(E) -In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (Twenty-Fourth Amendment)
.........Rules, 2002.
....(2) They shall come into force from the 1st day of April, 2003.

2. In the Income-tax Rules, 1962, for Appendix I, the following Appendix shall be
substituted, namely:-

'APPENDIX I
[See rule 5]
TABLE OF RATES AT WHICH DEPRECIATION IS ADMISSIBLE

Block of assets

Depreciation
allowance as
percentage of
written down
value

PART A
TANGIBLE ASSETS

I. BUILDING [See Notes 1 to 4 below the Table]

(1)

Buildings which are used mainly for residential purposes except
hotels and boarding houses

(2)

Buildings other than those used mainly for residential purposes and
not covered by sub-items (1) above and (3) below

(3)

Buildings acquired on or after the 1st day of September, 2002 for
installing machinery and plant forming part of water supply project or water treatment system and which is put to use for the purpose of business of providing infrastructure facilities under clause (i) of subsection (4) of section 80-IA

100

(4)

Purely temporary erections such as wooden structures

100

II. FURNITURE AND FITTINGS

Furniture and fittings including electrical fittings
[See Note 5 below the Table]

III. MACHINERY AND PLANT

(1)

Machinery and plant other than those covered by sub-items (2), (3) and (8) below

(2)

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

(3)

(i) Aeroplanes - Aeroengines

(ii) Motor buses, motor lorries and motor taxis used in a
business of running them on hire

(iii) Commercial vehicle which is acquired by the assessee
on or after the 1st day of October, 1998, but before the
1st day of April, 1999 and is put to use for any period
before the 1st day of April, 1999 for the purposes of
business or profession in accordance with the third
proviso to clause (ii) of sub-section (1) of section 32
[See Note 6 below the Table]

(iv) New commercial vehicle which is acquired on or after
the 1st day of October, 1998, but before the 1st day of
April, 1999 in replacement of condemned vehicle of
over 15 years of age and is put to use for any period
before the 1st day of April, 1999 for the purposes of
business or profession in accordance with the third
proviso to clause (ii) of sub-section (1) of section 32
[See Note 6 below the Table]

(v) New commercial vehicle which is acquired on or after
the 1st day of April, 1999 but before the 1st day of April,
2000 in replacement of condemned vehicle of over 15
years of age and is put to use before the 1st day of
April, 2000 for the purposes of business or profession in
accordance with the second proviso to clause (ii) of
sub-section (1) of section 32 [See Note 6 below the
Table]

(vi) New commercial vehicle which is acquired on or after
the 1st day of April, 2001 but before the 1st day of April,
2002 and is put to use before the 1st day of April, 2002
for the purposes of business or profession [See Note 6
below the Table]

(vii) Moulds used in rubber and plastic goods factories

(viii) Air pollution control equipment, being -

Electrostatic precipitation systems
Felt-filter systems
Dust collector systems
Scrubber-counter current/venturi/packedbed/
cyclonic scrubbers
Ash handling system and evacuation system

(ix) Water pollution control equipment, being -
(a) Mechanical screen systems
(b) Aerated detritus chambers (including air compressor)
(c) Mechanically skimmed oil and grease removal systems
(d) Chemical feed systems and flash mixing equipment
(e) Mechanical flocculators and mechanical reactors
(f) Diffused air/mechanically aerated activated sludge
systems
(g) Aerated lagoon systems
(h) Biofilters
(i) Methane-recovery anaerobic digester systems
(j) Air floatation systems
(k) Air/steam stripping systems
(l) Urea Hydrolysis systems
(m) Marine outfall systems
(n) Centrifuge for dewatering sludge
(o) Rotating biological contractor or bio-disc
(p) Ion exchange resin column
(q) Activated carbon column
80

(x) (a) Solidwaste, control equipments being, -
caustic/lime/chrome/ mineral/cryolite recovery
system
(b) Solidwaste recycling and resource recovery systems
80

(xi) Machinery and plant, used in semi-conductor industry
covering all integrated circuits (ICs) (excluding hybrid
integrated circuits) ranging from small scale integration
(SSI) to large scale integration/very large scale integration
(LSI/VLSI) as also discrete semi-conductor devices such as
diodes, transistors, thyristors, triacs, etc., other than those
covered by entries (viii), (ix) and (x) of this sub-item and
sub-item (8) below.
40

(4)

Containers made of glass or plastic used as re-fills

(5)

Computers including computer software [See note 7 below the Table]

(6)

Machinery and plant, used in weaving, processing and garment sector of textile industry, which is purchased under TUFS on or after the 1st day of April, 2001 but before the 1st day of April, 2004 and is put to use before the 1st day of April, 2004 [See Note 8 below the Table]

(7)

Machinery and plant, acquired and installed on or after the 1st day of September, 2002 in a water supply project or a water treatment system and which is put to use for the purpose of business of providing infrastructure facility under clause (i) of sub-section (4) of section 80-IA [See Notes 4 and 9 below the Table]

100

(8)

(i) Wooden parts used in artificial silk manufacturing machinery

(ii) Cinematograph films - bulbs of studio lights

(iii) Match factories - Wooden match frames

(iv) Mines and quarries:

(a) Tubs, winding ropes, haulage ropes and sand stowing pipes

(b) Safety lamps

(v) Salt works - Salt pans, reservoirs and condensers, etc., made of earthy, sandy or clayey material or any other similar material

(vi) Flour mills - Rollers

(vii) Iron and steel industry - Rolling mill rolls

(viii) Sugar works - Rollers

(ix) Energy saving devices, being-

A. Specialised boilers and furnaces:

(a) Ignifluid/fluidized bed boilers

(b) Flameless furnaces and continuous pusher type furnaces

(c) Fluidized bed type heat treatment furnaces

(d) High efficiency boilers (thermal efficiency higher than75 per
cent in case of coal fired and 80 per cent in case of oil/gas
fired boilers)

B. Instrumentation and monitoring system for monitoring energy
flows:

(a) Automatic electrical load monitoring systems

(b) Digital heat loss meters

(c) Micro-processor based control systems

(d) Infra-red thermography

(e) Meters for measuring heat losses, furnace oil flow, steam flow, electric energy and power factor meters

(f) Maximum demand indicator and clamp on power meters

(g) Exhaust gases analyser

(h) Fuel oil pump test bench
80

C. Waste heat recovery equipment:

(a) Economisers and feed water heaters

(b) Recuperators and air pre-heaters

(c) Heat pumps

(d) Thermal energy wheel for high and low temperature waste
heat recovery
80

D. Co-generation systems:

(a) Back pressure pass out, controlled extraction, extractioncum-
condensing turbines for co-generation along with pressure boilers

(b) Vapour absorption refrigeration systems

(c) Organic rankine cycle power systems

(d) Low inlet pressure small steam turbines
80

E. Electrical equipment:

(a) Shunt capacitors and synchronous condenser systems

(b) Automatic power cut off devices (relays) mounted on
individual motors

(c) Automatic voltage controller

(d) Power factor controller for AC motors

(e) Solid state devices for controlling motor speeds

(f) Thermally energy-efficient stenters (which require 800 or less
kilocalories of heat to evaporate one kilogram of water)

(g) Series compensation equipment
(h) Flexible AC Transmission (FACT) devices - Thyristor controlled
series compensation equipment

(i) Time of Day (TOD) energy meters

(j) Equipment to establish transmission highways for National
Power Grid to facilitate transfer of surplus power of one
region to the deficient region

(k) Remote terminal units/intelligent electronic devices,
computer hardware/software, router/bridges, other required
equipment and associated communication systems for
supervisory control and data acquisition systems, energy
management systems and distribution management systems
for power transmission systems

(l) Special energy meters for Availability Based Tariff (ABT)
80

F. Burners:

(a) 0 to 10 per cent excess air burners

(b) Emulsion burners

(c) Burners using air with high pre-heat temperature (above 300°
C)
80

G. Other equipment:

(a) Wet air oxidation equipment for recovery of chemicals and
heat

(b) Mechanical vapour recompressors

(c) Thin film evaporators

(d) Automatic micro-processor based load demand controllers

(e) Coal based producer gas plants

(f) Fluid drives and fluid couplings

(g) Turbo charges/super-charges

(h) Sealed radiation sources for radiation processing plants
80

(x) Gas cylinders including valves and regulators 80

(xi) Glass manufacturing concerns - Direct fire glass melting furnaces 80

(xii) Mineral oil concerns:

(a) Plant used in field operations (above ground) distribution -
Returnable packages

(b) Plant used in field operations (below ground), but not
including kerbside pumps including under ground tanks and
fittings used in field operations (distribution) by mineral oil
concerns
80

(xiii) Renewal energy devices being -

(a) Flat plate solar collectors

(b) Concentrating and pipe type solar collectors

(c) Solar cookers

(d) Solar water heaters and systems

(e) Air/gas/fluid heating systems

(f) Solar crop drivers and systems

(g) Solar refrigeration, cold storages and air conditioning systems

(h) Solar steels and desalination systems

(i) Solar power generating systems

(j) Solar pumps based on solar-thermal and solar-photovoltaic
conversion

(k) Solar-photovoltaic modules and panels for water pumping
and other applications

(l) Wind mills and any specially designed devices which run on
wind mills

(m) Any special devices including electric generators and pumps
running on wind energy

(n) Biogas-plant and biogas-engines

(o) Electrically operated vehicles including battery powered or
fuel-cell powered vehicles

(p) Agricultural and municipal waste conversion devices
producing energy

(q) Equipment for utilising ocean waste and thermal energy

(r) Machinery and plant used in the manufacture of any of the
above sub-items
80

100

100

100

100

100

80

80

80

(9)

(i) Books owned by assessees carrying on a profession -
(a) Books, being annual publications
(b) Books, other than those covered by entry (a) above
(ii) Books owned by assessees carrying on business in running lending libraries

100
60
100

IV. SHIPS

(1)

Ocean-going ships including dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes and fishing vessels with wooden hull

(2)

Vessels ordinarily operating on inland waters, not covered by sub-item (3) below

(3)

Vessels ordinarily operating on inland waters being speed boats [See Note 10 below the Table]

PART B
INTANGIBLE ASSETS

Know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature

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Notes:

1. "Buildings" include roads, bridges, culverts, wells and tubewells.

2. A building shall be deemed to be a building used mainly for residential purposes, if the built-up floor area thereof used for residential purposes is not less than sixty-six and two-third per cent of its total built up floor area and shall include any such building in the factory premises.

3. In respect of any structure or work by way of renovation or improvement in or in relation to a building referred to in Explanation 1 of clause (ii) of sub-section (1) of section 32, the percentage to be applied will be the percentage specified against sub-item (1) or (2) of item I as may be appropriate to the class of building in or in relation to which the renovation or improvement is effected. Where the structure is constructed or the work is done by way of extension of any such building, the percentage to be applied would be such percentage as would be appropriate, as if the structure or work constituted a separate building.

4. Water treatment system includes system for desalinisation, demineralisation and purification of water.

5. "Electrical fittings" include electrical wiring, switches, sockets, other fittings and fans, etc.

6. “Commercial vehicle” means “heavy goods vehicle”, “heavy passenger motor vehicle”, “light motor vehicle”, “medium goods vehicle” and “medium passenger motor vehicle” but does not include “maxi-cab”, “motor-cab”, “tractor” and “road-roller”. The expressions “heavy goods vehicle”, “heavy passenger motor vehicle”, “light motor vehicle”, “medium goods vehicle”, “medium passenger motor vehicle”, “maxi-cab”, “motor-cab”, “tractor” and “roadroller” shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988).

7. "Computer software" means any computer programme recorded on any disc, tape, perforated media or other information storage device.

8. "TUFS" means Technology Upgradation Fund Scheme announced by the Government of Indiain the form of a Resolution of the Ministry of Textiles vide No.28/1/99-CTI of 31.3.1999.

9. Machinery and plant includes pipes needed for delivery from the source of supply of raw water to the plant and from the plant to the storage facility.

10. “Speed boat” means a motor boat driven by a high speed internal combustion engine capable of propelling the boat at a speed exceeding 24 kilometres per hour in still water and so designed that when running at a speed, it will plane, i.e., its bow will rise from the water.'

Notification No. 291/2002
F.No.142/19/2002-TPL

(DEEPIKA MITTAL)
Under Secretary to the Government of India

Note.- The principal rules were published vide Notification No.S.O.969(E), dated the 26th March, 1962 and last amended by Income-tax (Twenty-Third Amendment) Rules, 2002 vide Notification S.O. No. 943 (E), dated the 6th September, 2002.

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