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  1. Depreciation is the systematic allocation of the depreciable amount of an asset over

its useful life. The depreciable amount of an asset is the cost of an asset or other amount

substituted for cost, less its residual value. The useful life of an asset is the period over

which an asset is expected to be available for use by an entity, or the number of production

or similar units expected to be obtained from the asset by the entity.

  1. For the purpose of this Schedule, the term depreciation includes amortisation.
  2. Without prejudice to the foregoing provisions of paragraph 1,—

(i) In case of such class of companies, as may be prescribed and whose financial

statements comply with the accounting standards prescribed for such class of

companies under section 133 the useful life of an asset shall not normally be different

from the useful life and the residual value shall not be different from that as indicated

in Part C, provided that if such a company uses a useful life or residual value which is

different from the useful life or residual value indicated therein, it shall disclose the

justification for the same.

(ii) In respect of other companies the useful life of an asset shall not be longer

than the useful life and the residual value shall not be higher than that prescribed in

Part C.

(iii) For intangible assets, the provisions of the Accounting Standards mentioned

under sub-para (i) or (ii), as applicable, shall apply.


  1. The useful life or residual value of any specific asset, as notified for accounting

purposes by a Regulatory Authority constituted under an Act of Parliament or by the Central

Government shall be applied in calculating the depreciation to be provided for such asset

irrespective of the requirements of this Schedule.


  1. Subject to Parts A and B above, the following are the useful lives of various tangible


Nature of assets                                                                                                         Useful Life

  1. Buildings [NESD]

(a) Buildings (other than factory buildings) RCC Frame Structure                           60 Years

(b) Buildings (other than factory buildings) other than RCC Frame Structure          30 Years

(c) Factory buildings                                                                                                   -do-

(d) Fences, wells, tube wells                                                                                       5 Years

(e) Others (including temporary structure, etc.)                                                          3 Years

  1. Bridges, culverts, bunders, etc. [NESD]                                                             30 Years

III. Roads [NESD]

(a) Carpeted roads

(i) Carpeted Roads-RCC                                                                                            10 Years

(ii) Carpeted Roads-other than RCC                                                                          5 Years

(b) Non-carpeted roads                                                                                               3 Years

  1. Plant and Machinery

(iGeneral rate applicable to plant and machinery not covered under

special plant and machinery

(a) Plant and Machinery other than continuous process plant not

covered under specific industries                                                                   15 Years

(b) continuous process plant for which no special rate has been

prescribed under (ii) below [NESD]                                                               8 Years

(iiSpecial Plant and Machinery

(a) 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 except bulbs                                 13 Years

  1. Projecting equipment for exhibition of films -do-

(b) Plant and Machinery used in glass manufacturing

  1. Plant and Machinery except direct fire glass melting furnaces —

Recuperative and regenerative glass melting furnaces                                   13 Years

  1. Plant and Machinery except direct fire glass melting furnaces —

Moulds [NESD]                                                                                              8 Years

  1. Float Glass Melting Furnaces [NESD]                                                       10 Years

(c) Plant and Machinery used in mines and quarries—Portable

underground machinery and earth moving machinery used in

open cast mining [NESD]                                                                               8 Years

(d) Plant and Machinery used in Telecommunications [NESD]

  1. Towers                                                                                                        18 Years
  2. Telecom transceivers, switching centres, transmission and

other network equipment                                                                                13 Years

  1. Telecom—Ducts, Cables and optical fibre                                                 18 Years
  2. Satellites                                                                                                      -do-

(e) Plant and Machinery used in exploration, production and

refining oil and gas [NESD]

  1. Refineries                                                                                                    25 Years
  2. Oil and gas assets (including wells), processing plant and facilities           -do-
  3. Petrochemical Plant                                                                                    -do-
  4. Storage tanks and related equipment                                                          -do-
  5. Pipelines                                                                                                      30 Years
  6. Drilling Rig                                                                                                 -do-
  7. Field operations (above ground) Portable boilers, drilling tools,

well-head tanks, etc.                                                                                       8 Years

  1. Loggers                                                                                                       –do

() Plant and Machinery used in generation, transmission and distribution

of power [NESD]

  1. Thermal/ Gas/ Combined Cycle Power Generation Plant                           40 Years
  2. Hydro Power Generation Plant                                                                  -do-
  3. Nuclear Power Generation Plant                                                                -do-
  4. Transmission lines, cables and other network assets                                   -do-
  5. Wind Power Generation Plant                                                                    22 Years
  6. Electric Distribution Plant                                                                          35 Years
  7. Gas Storage and Distribution Plant                                                            30 Years
  8. Water Distribution Plant including pipelines                                              -do-

(g) Plant and Machinery used in manufacture of steel

  1. Sinter Plant                                                                                                 20 Years
  2. Blast Furnace                                                                                              -do-
  3. Coke ovens                                                                                                 -do-
  4. Rolling mill in steel plant                                                                            -do-
  5. Basic oxygen Furnace Converter                                                                25 Years

(h) Plant and Machinery used in manufacture of non-ferrous metals

  1. Metal pot line [NESD]                                                                                40 Years
  2. Bauxite crushing and grinding section [NESD]                                         -do-
  3. Digester Section [NESD]                                                                           -do-
  4. Turbine [NESD]                                                                                          -do-
  5. Equipments for Calcination [NESD]                                                          -do-
  6. Copper Smelter [NESD]                                                                             -do-
  7. Roll Grinder                                                                                                40 Years
  8. Soaking Pit                                                                                                  30 Years
  9. Annealing Furnace                                                                                      -do-
  10. Rolling Mills                                                                                             -do-
  11. Equipments for Scalping, Slitting , etc. [NESD]                                      -do-
  12. Surface Miner, Ripper Dozer, etc., used in mines                                    25 Years
  13. Copper refining plant [NESD]                                                                  -do-

(i) Plant and Machinery used in medical and surgical operations [NESD]

  1. Electrical Machinery, X-ray and electrotherapeutic apparatus and

accessories thereto, medical, diagnostic equipments, namely,

Cat-scan, Ultrasound Machines, ECG Monitors, etc.                                    13 Years

  1. Other Equipments.                                                                                      15 Years

(j) Plant and Machinery used in manufacture of pharmaceuticals and

chemicals [NESD]

  1. Reactors                                                                                                      20 Years
  2. Distillation Columns                                                                                   -do-
  3. Drying equipments/Centrifuges and Decanters                                          -do-
  4. Vessel/storage tanks                                                                                    –do

(k) Plant and Machinery used in civil construction

  1. Concreting, Crushing, Piling Equipments and Road Making

Equipments                                                                                                     12 Years

  1. Heavy Lift Equipments—

Cranes with capacity of more than 100 tons                                                  20 Years

Cranes with capacity of less than 100 tons                                                     15 Years

  1. Transmission line, Tunneling Equipments [NESD]                                    10 Years
  2. Earth-moving equipments                                                                           9 Years
  3. Others including Material Handling /Pipeline/Welding

Equipments [NESD]                                                                                       12 Years

(l) Plant and Machinery used in salt works [NESD]                                      15 Years

  1. Furniture and fittings [NESD]

(i) General furniture and fittings                                                                                 10 Years

(ii) Furniture and fittings used in hotels, restaurants and boarding houses,

schools, colleges and other educational institutions, libraries; welfare

centres; meeting halls, cinema houses; theatres and circuses; and

furniture and fittings let out on hire for use on the occasion of marriages

and similar functions.                                                                                                  8 Years

  1. Motor Vehicles [NESD]
  2. Motor cycles, scooters and other mopeds                                                               10 Years
  3. Motor buses, motor lorries, motor cars and motor taxies used in

a business of running them on hire                                                                             6 Years

  1. Motor buses, motor lorries and motor cars other than those used

in a business of running them on hire                                                                         8 Years

  1. Motor tractors, harvesting combines and heavy vehicles                                       -do-
  2. Electrically operated vehicles including battery powered or fuel

cell powered vehicles                                                                                                  8 Years

VII. Ships [NESD]

  1. Ocean-going ships

(i) Bulk Carriers and liner vessels                                                                               25 Years

(ii) Crude tankers, product carriers and easy chemical carriers with or

without conventional tank coatings.                                                                           20 Years

(iii) Chemicals and Acid Carriers:

(a) With Stainless steel tanks                                                                                      25 Years

(b) With other tanks                                                                                                    20 Years

(iv) Liquified gas carriers                                                                                            30 Years

(v) Conventional large passenger vessels which are used for cruise

purpose also                                                                                                                -do-

(vi) Coastal service ships of all categories                                                                   -do-

(vii) Offshore supply and support vessels                                                                   20 Years

(viii) Catamarans and other high speed passenger for ships or boats                          –do

(ix) Drill ships                                                                                                              25 Years

(x) Hovercrafts                                                                                                            15 Years

(xi) Fishing vessels with wooden hull                                                                         10 Years

(xii) Dredgers, tugs, barges, survey launches and other similar ships

used mainly for dredging purposes                                                                             14 Years

  1. Vessels ordinarily operating on inland waters—

(i) Speed boats                                                                                                            13 Years

(ii) Other vessels                                                                                                         28 Years

VIII. Aircrafts or Helicopters [NESD]                                                                    20 Years

  1. Railways sidings, locomotives, rolling stocks, tramways and

railways used by concerns, excluding railway concerns [NESD]                         15 Years

  1. Ropeway structures [NESD]                                                                               15 Years
  2. Office equipment [NESD]                                                                                  5 Years

XII. Computers and data processing units [NESD]

(i) Servers and networks                                                                                             6 Years

(ii) End user devices, such as, desktops, laptops, etc.                                                3 Years

XIII. Laboratory equipment [NESD]

(i) General laboratory equipment                                                                                10 Years

(ii) Laboratory equipments used in educational institutions                                       5 Years

XIV. Electrical Installations and Equipment [NESD]                                           10 years

  1. Hydraulic works, pipelines and sluices [NESD]                                             15 Years


  1. “Factory buildings” does not include offices, go downs, staff quarters.
  2. Where, during any financial year, any addition has been made to any asset, or

where any asset has been sold, discarded, demolished or destroyed, the depreciation on

such assets shall be calculated on a pro rata basis from the date of such addition or, as the

case may be, up to the date on which such asset has been sold, discarded, demolished or


  1. The following information shall also be disclosed in the accounts, namely:—

(i) depreciation methods used; and

(ii) the useful lives of the assets for computing depreciation, if they are different

from the life specified in the Schedule.

  1. Useful life specified in Part C of the Schedule is for whole of the asset. Where cost

of a part of the asset is significant to total cost 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 shall be

determined separately.

  1. Depreciable amount is the cost of an asset, or other amount substituted for cost, less

its residual value. Ordinarily, the residual value of an asset is often insignificant but it should

generally be not more than 5% of the original cost of the asset.

  1. The useful lives of assets working on shift basis have been specified in the Schedule

based on their single shift working. Except for assets in respect of which no extra shift

depreciation is permitted (indicated by NESD in Part C above), if an asset is used for any time

during the year for double shift, the depreciation will increase by 50% for that period and in

case of the triple shift the depreciation shall be calculated on the basis of 100% for that


  1. From the date this Schedule comes into effect, the carrying amount of the asset as

on that date—

(a) shall be depreciated over the remaining useful life of the asset as per this


(b) after retaining the residual value, shall be recognised in the opening balance

of retained earnings where the remaining useful life of an asset is nil.

  1. ‘‘Continuous process plant’’ means a plant which is required and designed to operate

for twenty-four hours a day.




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