In this article, we will discuss the Provisions applicable for Additional depreciation on new machinery or plant under section 32 of the Income tax Act, 1961.
What is the provision applicable for Additional deprecation on new machinery or plant under section 32?
Machinery and Plant qualifying for depreciation @40% [u/s 32, Rule 5(2)]:
Any new machinery or plant installed during the previous year relevant to the assessment year 1988-89 (or any subsequent year) will qualify for depreciation @ 40% if the following conditions are fulfilled:
(a) Such machinery or plant is used for the purpose of business of manufacture or production of any article or thing which is manufactured or produced by using any technology (including any process) or other know-how developed in or invented in a laboratory owned or financed by the Government or laboratory owned by a public sector company or a university or an institution that is recognized in this behalf by the Secretary, Department of Scientific and Industrial Research, Government of India;
(b) The right to use such technology (including any process) or other know-how or to manufacture or produce such article or thing has been acquired from the owner of such laboratory or any person obtaining title from such owner;
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(c) The return furnished by the assessee for any previous year in which the said machinery or plant is acquired shall be accompanied by a certificate from the Secretary, Department of Scientific and Industrial Research, Government of India to effect that such thing or article is produced by using that technology (including any process) or other know-how that is developed in such laboratory or is a thing or article invented in such laboratory; and
(d) Such machinery or plant is not used for the purpose of business of manufacture or production of any article or thing specified in Eleventh Schedule.
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