| 1. |
Depreciation Rate on Plant & Machinery to be increased |
15% |
25% |
The present rate of depreciation on the plant and machinery is inadequate for automobile industry.
25% was the rate applicable up to the AY 2005-06. The rate of 25% was originally fixed considering the average economic life of an asset. Hence this should be reinstated.
The rate should be increased to encourage the Automobile Industry. |
| 2. |
Motor Vehicle Depreciation rate |
15% |
25% |
15% WDV rate means useful life of 18-19 years for a car, which is totally unrealistic. Income tax should be levied on real income. Hence Depreciation should also be based on real useful life of cars, which is on average not more than 10 years. Hence depreciation rate should be increased to 25%. |
