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India: Maximum depreciation rate limited to 40%; R&D weighted deduction

India: Maximum depreciation rate limited to 40%

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).


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  • Rules restricting depreciation rate to 40%: The Central Board of Direct Taxes issued guidance (a notification) that amends Rule 5 of the Income-tax Rules, 1962, to provide that: (1) the depreciation allowance for an eligible domestic company for “any block of assets” is limited to 40% on the written down value of that block of assets, effective 1 April 2016; and (2) the table of depreciation rates has been amended, and previous depreciation rates of 50%, 60%, 80% and 100% are now limited to 40%, effective 1 April 2017. Read a November 2016 report [PDF 325]
  • Assessing Officer required to allow weighted deduction, once R&D facility is approved by DSIR: A Visakhapatnam Bench of the Income-tax Appellate Tribunal held that the Department of Scientific and Industrial Research (and not the Assessing Officer) had authority to reach a decision concerning a research and development facility, but once approved and assuming appropriate application by the taxpayer, the Assessing Officer must allow the weighted deduction as claimed by the taxpayer. The case is: Efftronics Systems Pvt. Ltd. Read a November 2016 report [PDF 337 KB]

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