Appendix II — Table of rates at which depreciation is admissible. Made under s.33 of the Income-tax Act, 2025.
Appendix II gives effect to Section 33 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
Appendix II is the Table of rates at which depreciation is admissible, referred to by rule 25. Its rates are expressed as a percentage of actual cost, not of written down value, and they cover the plant, works and equipment of an electricity undertaking.
Entry (a) covers plant and machinery in generating stations including plant foundations: hydro-electric at 3.4, steam electric nhrs and waste heat recovery boilers or plants at 7.84, and diesel electric and gas plant at 8.24. Entry (b) gives cooling towers and circulating water systems 7.84. Entry (c) covers hydraulic works forming part of a hydro-electric system: dams, spillways, weirs, canals, reinforced concrete flumes and syphons at 1.95, and reinforced concrete pipelines, surge tanks, steel pipelines, sluice gates, steel surge tanks, hydraulic control valves and other hydraulic works at 3.4.
Entry (d) covers buildings and civil engineering works of a permanent character not mentioned above: offices and showrooms at 3.02, buildings containing thermo-electric generating plant at 7.84, buildings containing hydro-electric generating plant at 3.4, temporary erections such as wooden structures at 33.4, roads other than kutcha roads at 3.02, and others at 3.02. Entry (e) covers transformers, transformer kiosk sub-station equipment and other fixed apparatus including plant foundations: transformers including foundations having a rating of 100 kilovolt amperes and over at 7.81, and others at 7.84. Entry (f) gives switchgear including cable connections 7.84. Entry (g) covers lightning arrestors — station type at 7.84, pole type at 12.77 and synchronous condenser at 5.27. Entry (h) gives batteries 33.4, with underground cable including joint boxes and disconnection boxes at 5.27 and cable duct system at 3.02.
Entry (i) covers overhead lines including supports: lines on fabricated steel operating at nominal voltages higher than 66 kilovolt at 5.27, lines on steel supports operating at nominal voltages higher than 13.2 kilovolts but not exceeding 66 kilovolts at 7.84, lines on steel or reinforced concrete supports at 7.84, and lines on treated wood supports at 7.84. Meters take 12.77 and self-propelled vehicles 33.40. Air-conditioning plants are 12.77 if static and 33.40 if portable. Office furniture and fittings, office equipments, internal wiring including fittings and apparatus, and street light fittings are each 12.77. Apparatus let on hire is 33.4 other than motors and 12.77 for motors. Communication equipment — radio and high frequency carrier system, and telephone lines and telephones — is 12.77 each. The residuary entry (p), any other assets not covered above, is 7.69.
Rule 25(3) allows the allowance under section 33(2) to be calculated on the actual cost of assets specified in the Table in Appendix II, but the rule states no rates. This Table is where they are. It exists separately from Appendix I because it is a straight-line schedule for a class of undertaking whose assets — dams, generating plant, overhead lines — have lives that a written down value block would not reflect.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Hydro-electric plant and machinery in generating stations including plant foundations | 3.4% of actual cost | Entry (a)(i) | Appendix II, S. No. (a)(i) |
| Steam electric nhrs and waste heat recovery boilers or plants | 7.84% of actual cost | Entry (a)(ii) | Appendix II, S. No. (a)(ii) |
| Diesel electric and gas plant | 8.24% of actual cost | Entry (a)(iii) | Appendix II, S. No. (a)(iii) |
| Cooling towers and circulating water systems | 7.84% of actual cost | Entry (b) | Appendix II, S. No. (b) |
| Dams, spillways, weirs, canals, reinforced concrete flumes and syphons | 1.95% of actual cost | Hydraulic works forming part of a hydro-electric system; the lowest rate in the Table | Appendix II, S. No. (c)(i) |
| Reinforced concrete pipelines, surge tanks, steel pipelines, sluice gates, steel surge tanks, hydraulic control valves and other hydraulic works | 3.4% of actual cost | Hydraulic works forming part of a hydro-electric system | Appendix II, S. No. (c)(ii) |
| Office and showroom buildings, roads other than kutcha roads, and other permanent civil works | 3.02% of actual cost | Buildings and civil engineering works of permanent character not mentioned above | Appendix II, S. No. (d)(i), (v) and (vi) |
| Buildings containing thermo-electric generating plant | 7.84% of actual cost | Entry (d)(ii) | Appendix II, S. No. (d)(ii) |
| Buildings containing hydro-electric generating plant | 3.4% of actual cost | Entry (d)(iii) | Appendix II, S. No. (d)(iii) |
| Temporary erections such as wooden structures | 33.4% of actual cost | Entry (d)(iv) | Appendix II, S. No. (d)(iv) |
| Transformers including foundations rated 100 kilovolt amperes and over | 7.81% of actual cost | Other transformer and sub-station apparatus takes 7.84 | Appendix II, S. No. (e)(i) |
| Switchgear including cable connections | 7.84% of actual cost | Entry (f) | Appendix II, S. No. (f) |
| Lightning arrestors | 7.84% station type, 12.77% pole type, 5.27% synchronous condenser | Entry (g) | Appendix II, S. No. (g) |
| Batteries | 33.4% of actual cost | Entry (h) | Appendix II, S. No. (h) |
| Underground cable including joint boxes and disconnection boxes, and cable duct system | 5.27% and 3.02% of actual cost | Entries listed under (h) | Appendix II, S. No. (h)(i) and (ii) |
| Overhead lines on fabricated steel operating above 66 kilovolt | 5.27% of actual cost | Other overhead line entries take 7.84 | Appendix II, S. No. (i)(i) |
| Meters | 12.77% of actual cost | Entry (j) | Appendix II, S. No. (j) |
| Self-propelled vehicles | 33.40% of actual cost | Entry (k) | Appendix II, S. No. (k) |
| Air-conditioning plants | 12.77% static, 33.40% portable | Entry (l) | Appendix II, S. No. (l) |
| Office furniture and fittings, office equipments, internal wiring including fittings and apparatus, and street light fittings | 12.77% of actual cost | Entry (m) | Appendix II, S. No. (m) |
| Apparatus let on hire | 33.4% other than motors, 12.77% motors | Entry (n) | Appendix II, S. No. (n) |
| Communication equipment — radio and high frequency carrier system, telephone lines and telephones | 12.77% of actual cost | Entry (o) | Appendix II, S. No. (o) |
| Any other assets not covered above | 7.69% of actual cost | The residuary entry | Appendix II, S. No. (p) |
These percentages are of actual cost, and they behave quite differently from the written down value rates in Appendix I. Rule 25(3) applies them on the actual cost to the assessee, so the same amount comes off each year, and rule 25(4) is what eventually stops the allowance: the aggregate over the years cannot exceed the actual cost of the asset. The Table classifies by what the asset physically is and how it is mounted, not by who uses it — the same overhead line takes 5.27 on fabricated steel above 66 kilovolt but 7.84 on steel supports in the 13.2 to 66 kilovolt band, and a transformer rated 100 kilovolt amperes and over takes 7.81 while everything else in that entry takes 7.84. Only assets acquired on or after 1st April, 1977 come within the Appendix at all, under rule 25(3). The residuary entry at 7.69 catches whatever the specific entries do not, so nothing in the undertaking is left without a rate.
An electricity undertaking commissions a diesel electric plant costing Rs. 10 crore and a new office building costing Rs. 4 crore. Under rule 25(3) with this Table, the plant attracts 8.24% of actual cost, Rs. 82,40,000 for the year, and the office building 3.02%, Rs. 12,08,000. Both continue at the same figure each year until, under rule 25(4), the aggregate allowed reaches the actual cost of the asset.
You meet it in the depreciation schedule of an electricity undertaking that has not opted into Appendix I, where each asset is matched to a class in column (2) and carries the column (3) percentage of its actual cost.
TABLE OF RATES AT WHICH DEPRECIATION IS ADMISSIBLE
Any other assets not covered above 7.69