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Govt cuts depreciation rates to plug tax loopholes
New Delhi, Oct 04: Over-riding the industry`s plea, the government has decided to cut depreciation rates for income tax benefits on buildings used as hotels, books used by assessees, air pollution control equipment and certain other items for enhancing tax revenues.
As per the substituted appendix to the Income-tax rules, 1962, buildings have been classified as buildings mainly used for residential purposes excluding hotels and boarding houses which will carry a depreciation rate of 5 per cent.
All other buildings will carry an across-the-board depreciation benefit of 10 per cent as against the present classifications based on buildings used for residential and mainly for commercial purposes.
The existing rate of 20 per cent available to buildings used as hotels and buildings with dwelling units, each with a plinth area not exceeding 80 sq metres, will no longer be available, the notification details issued on Friday said.
Bureau Report