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May 11, 2001
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Money > Business Headlines > Report May 11, 2001 |
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Govt increases depreciation rates for auto, textiles, shippingBS Bureau In a bid to give a boost to sectors like automobiles, textile and shipping, the government on Thursday increased the depreciation rates applicable to these sectors. The obsolescence rate for new commercial vehicles acquired and put to use between April 1, 2001, and April 1, 2002, has been enhanced to 50 per cent from 40 per cent. However, automobile majors, including Ratan Tata, chairman, Tata group, told reporters that this measure will have "a marginal impact on the industry." "The demand for commercial vehicles is dependent upon the general economic growth. Since few infrastructure projects are being taken up, there will be little growth in the demand for commercial vehicles," Tata added. Besides, the auto industry feels that since a large chunk of transport companies in the country are non-corporatised, few transport companies will actually make use of the depreciation benefit. For the textile sector, the government has enhanced the depreciation rate from 25 per cent to 50 per cent for plant and machinery purchased under the Technology Upgradation Fund Scheme between April 1, 2001, and April 1, 2004. This provision extends to all the three sectors within the textile industry-weaving, processing and garment. The plant and machinery will have to be put to use by April 1, 2004. The depreciation rates for ship and inland water vessels have also been increased to 25 per cent from the current rate of 10 per cent to 20 per cent. The government has also allowed 100 per cent tax deduction on payments made towards establishment and running of engineering and medical institutions in rural areas and towns with less than 500,000 population. This incentive has been introduced through an amendment in the Income Tax Rules. Information technology has now also been brought within the ambit of section 44AA of the Income Tax Act. As a result of this change, IT professionals will be required to keep and maintain the prescribed book of accounts if the annual gross receipts earned by them exceeds Rs 150,000. Powered by YOU MAY ALSO WANT TO READ:
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