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Depreciation Calculator for Companies Act 2013

24 May 2020 10:37:10 Comment(s) By TAXAJ

Depreciation Calculator for Companies Act 2013

  • Depreciation as per companies act 2013 for  Financial year 2014-15 and thereafter. These provisions are applicable from 01.04.2014 vide notification dated 27.03.2014 Depreciation is calculated by considering useful life of asset, cost and residual value.
  • Any method WDV or SLM can be used.
  • Schedule – II contains a list of useful life according to class of assets and the residual value shall not be more than five percent of the original cost of asset.
    However companies are free to adopt a useful life different from what specified in Schedule II and residual value more than 5%. The financial statements shall disclose such difference and provide justification in this behalf duly supported by technical advice.
  • If there is any addition to the asset or asset is sold, discarded, demolished or destroyed then the calculation is made according to the date of such event. In other words, if any asset is purchased or sold then the calculation will be made according to the date of purchase or sold i.e datewise calculation is made.
  • Depreciation method used is to be shown in accounts
  • Useful life of assets is to be disclosed only when it is taken different from Schedule – II
  • For assets in which NESD (No Exta Shift Depreciation) is mentioned in Schedule – II, the depreciation remains same irrespective of the no. of work shifts.
  • For other assets, if the asset is used for double shifts during any time of the year then the depreciation shall be increased by 50% for that period. Similarly if asset is used for triple shifts then depreciation shall be increased by 100% for that period.
  • Each Part of an item of an asset with a cost significant in relation to the total cost of the item shall be depreciated separately. Where cost of the part of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part should be determined separately.
    As per the amendment dated August 29, 2014 notified by the MCA, the said requirement shall be voluntary in respect for the financial year commencing on or after the April 1, 2104 and mandatory for financial statements in respect of financial years commencing on or after April 1, 2015.
    Component accounting is required to be done for the entire block of assets as at 1 April 2014 if a company opts to follow it voluntarily and as at 1 April, 2015 mandatorily. It cannot be restricted to only new assets acquired after 1 April 2014 or 1 April, 2015 as the case may be. If residual value is taken as 5% of cost of asset and life as per schedule – II then the depreciation rates on SLM and WDV basis are given in following link.

Transitional Provision

For assets existing on 01.04.2014 date of purchase is considered and the balance sheet value has to be depreciated over remaining useful life of assets.
If the remaining useful life of asset is NIL then the amount over and above residual value may be recognized in the opening balance of retained earnings or may be charged off to Profit and Loss account.

if a company uses Written Down Value (WDV) method of depreciation, it will need to calculate a new rate for depreciation to depreciate the asset over their remaining useful life using the formula for calculation of rate for depreciation as per WDV method which is reproduced below –

R= {1 – (s/c)^1/n } x 100

Where  R = Rate of Depreciation (in %)
n = Remaining useful life of the asset (in years)
s = Scrap value at the end of useful life of the asset
c= Cost of the asset/Written down value of the asset

It may be noted that upon transition to Schedule II, the company may have different rates of depreciation for individual assets within the same class in case of existing assets as there will be a different remaining useful life for each asset.

Depreciation rates as per Companies Act

Depreciation as per new companies act is allowed on the basis of useful life of assets and residual value. Depreciation rates are not given under the new companies act.
A table is given below of depreciation rates applicable if the asset is purchased on or after 01st April, 2014 and useful life is considered as given in companies act,2013 and residual value as 5%. For all other cases calculate depreciation rate using our depreciation calculator.

NESD stands for No Extra Shift Depreciation.

Nature of AssetsUseful
(I) Buildings [NESD]
(a) Building (other than factory buildings) RCC Frame Structure601.58%4.87%
(b) Building (other than factory buildings) other than RCC
Frame Structure
(c) Factory buildings303.17%9.50%
(d) Fences, wells, tube wells519.00%45.07%
(e) Other (including temporary structure, etc.)331.67%63.16%
(II) Bridges, culverts, bunkers, etc. [NESD]303.17%9.50%
(III) Roads [NESD]
(a) Carpeted Roads
(i) Carpeted Roads – RCC109.50%25.89%
(ii) Carpeted Roads – other than RCC519.00%45.07%
(b) Non-carpeted roads331.67%63.16%
(IV) Plant and Machinery
(a) General rate applicable to Plant and Machinery not
under Special Plant and Machinery
(i) Plant and Machinery other than continuous process plant not
covered under specific
(ii) Continuous process plant for which no special rate has been
prescribed under (ii) below
(b) Special Plant and Machinery
(i) Plant and Machinery related to production and exhibition
of Motion Picture Films
1 Cinematograph films – Machinery used in the production and
exhibition of cinematograph films, recording and reproducing
equipments, developing machines, printing machines, editing
machines, synchronizers and studio lights
2 Projecting equipment for exhibition of films137.31%20.58%
(ii) Plant and Machinery used in glass
1 Plant and Machinery except direct fire glass melting furnaces
– Recuperative and regenerative glass melting furnaces
2 Plant and Machinery except direct fire glass melting furnaces
– Moulds [NESD]
3 Float Glass Melting Furnaces [NESD]109.50%25.89%
(iii) Plant and Machinery used in mines and quarries Portable
underground machinery and earth moving machinery used in
open cast mining
(iv) Plant and Machinery used in Telecommunications [NESD]
1 Towers185.28%15.33%
2 Telecom transceivers, switching centres, transmission and
other network equipment
3 Telecom – Ducts, Cables and optical fibre185.28%15.33%
4 Satellites185.28%15.33%
(v) Plant and Machinery used in exploration, production and
refining oil and gas [NESD]
1 Refineries253.80%11.29%
2 Oil and gas assets (including wells), processing plant and
3 Petrochemical Plant253.80%11.29%
4 Storage tanks and related equipment253.80%11.29%
5 Pipelines303.17%9.50%
6 Drilling Rig303.17%9.50%
7 Field operations (above ground) Portable boilers, drilling tools,
well-head tanks, etc.
8 Loggers811.88%31.23%
(vi) Plant and Machinery used in generation, transmission and
distribution of power [NESD]
1 Thermal / Gas / Combined Cycle Power Generation Plant402.38%7.22%
2 Hydro Power Generation Plant402.38%7.22%
3 Nuclear Power Generation Plant402.38%7.22%
4 Transmission lines, cables and other network assets402.38%7.22%
5 Wind Power Generation Plant224.32%12.73%
6 Electric Distribution Plant352.71%8.20%
7 Gas Storage and Distribution Plant303.17%9.50%
8 Water Distribution Plant including pipelines303.17%9.50%
(vii) Plant and Machinery used in manufacture of
1 Sinter Plant204.75%13.91%
2 Blast Furnace204.75%13.91%
3 Coke Ovens204.75%13.91%
4 Rolling mill in steel plant204.75%13.91%
5 Basic Oxygen Furnace Converter253.80%11.29%
(viii) Plant and Machinery used in manufacture of non ferrous metals
1 Metal pot line [NESD]402.38%7.22%
2 Bauxite crushing and grinding section402.38%7.22%
3 Digester Section [NESD]402.38%7.22%
4 Turbine [NESD]402.38%7.22%
5 Equipments for Calcinations [NESD]402.38%7.22%
6 Copper Smelter [NESD]402.38%7.22%
7 Roll Grinder402.38%7.22%
8 Soaking Pit303.17%9.50%
9 Annealing Furnace303.17%9.50%
10 Rolling Mills303.17%9.50%
11 Equipments for Scalping, Slitting, etc. [NSED]303.17%9.50%
12 Surface Miner, Ripper Dozer, etc. used in mines253.80%11.29%
13 Copper refining plant [NSED]253.80%11.29%
(ix) Plant and Machinery used in medical and surgical operations
1 Electrical Machinery, X-ray and electrotherapeutic apparatus
and accessories thereto, medical, diagnostic equipments, namely,
Cat-scan, Ultrasound Machines, ECG Monitors, etc.
2 Other Equipments156.33%18.10%
(x) Plant and Machinery used in manufacture of pharmaceuticals
and chemicals [NESD]
1 Reactors204.75%13.91%
2 Distillation Columns204.75%13.91%
3 Drying equipments / Centrifuges and Decanters204.75%13.91%
4 Vessel / Storage tanks204.75%13.91%
(xi) Plant and Machinery used in civil construction
1 Concreting, Crushing, Piling Equipments and Road Making
2 Heavy Lift Equipments –
– Cranes with capacity more than 100 tons204.75%13.91%
– Cranes with capacity less than 100 tons156.33%18.10%
3 Transmission line, Tunnelling Equipments [NESD]109.50%25.89%
4 Earth-moving equipments910.56%28.31%
5 Others including Material Handling / Pipeline / Welding
Equipments [NESD]
(xii) Plant and Machinery used in salt works [NESD]156.33%18.10%
(V) Furniture and fittings [NESD]
(a) General furniture and fittings109.50%25.89%
(b) Furniture and fittings used in hotels, restaurants and boarding
houses, schools, colleges and other education institutions, libraries,
welfare centres, meeting halls, cinema houses, theatres and
circuses and furniture and fittings let out on hire for used on
occasion of marriages and similar functions
(VI) Motor Vehicles [NESD]
(a) Motor cycles, scooters and other mopeds109.50%25.89%
(b) Motor buses, motor lorries, motor cars and motor taxies
used in a business of running them on hire
(c) Motor buses, motor lorries, motor cars and motor taxies
other than those used in a business of running them on
(d) Motor tractors, harvesting combines and heavy vehicles811.88%31.23%
(e) Electrically operated vehicles811.88%31.23%
(VII) Ships [NESD]
(a) Ocean-going ships
(i) Bulk Carriers and liner vessels253.80%11.29%
(ii) Crude tankers, product carriers and easy chemical carriers
with or without conventional
(iii) Chemicals and Acid Carriers
1 With Stainless steel tanks253.80%11.29%
2 With other tanks204.75%13.91%
(iv) Liquefied gas carriers303.17%9.50%
(v) Conventional large passenger vessels which are used for
cruise purpose also
(vi) Coastal service ships of all categories303.17%9.50%
(vii) Offshore supply and support vessels204.75%13.91%
(viii) Catamarans and other high speed passenger
for ships or boats
(ix) Drill ships253.80%11.29%
(x) Hovercrafts156.33%18.10%
(xi) Fishing vessels with wooden hull109.50%25.89%
(xii) Dredgers, tugs, barges, survey launches and other
similar ships used mainly for dredging
(b) Vessels ordinarily operating on inland waters
(i) Speed boats137.31%20.58%
(ii) Other vessels283.39%10.15%
(VIII) Aircrafts or Helicopters [NESD]204.75%13.91%
(IX) Railway siding, locomotives, rolling stocks,
tramways and railway used by concerns, excluding railway
(X) Ropeway structures [NESD]156.33%18.10%
(XI) Office equipments [NESD]519.00%45.07%
(XII) Computers and data processing units [NESD]
(a) Servers and networks615.83%39.30%
(b) End user devices, such as, desktops, laptops, etc.331.67%63.16%
(XIII) Laboratory equipment [NESD]
(a) General laboratory equipment109.50%25.89%
(b) Laboratory equipments used in education institutions519.00%45.07%
(XIV) Electrical Installations and Equipment [NESD]109.50%25.89%
(XV) Hydraulic woks, pipelines and sluices [NESD]156.33%18.10%


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