Buildings S.No. Particulars Rate 1 Buildings which are used mainly for residential purposes except hotels and boarding houses. 5% 2 Buildings other than those used mainly for residential purposes and not covered by sub-items (1) above and (3) below. 10% 3 Buildings acquired on or after the 1st day oRead more
| Buildings | ||
| S.No. | Particulars | Rate |
| 1 | Buildings which are used mainly for residential purposes except hotels and boarding houses. | 5% |
| 2 | Buildings other than those used mainly for residential purposes and not covered by sub-items (1) above and (3) below. | 10% |
| 3 | Buildings acquired on or after the 1st day of September, 2002 for installing machinery and plant forming part of water supply project or water treatment system and which is put to use for the purpose of business of providing infra- structure facilities. | 40% |
| 4 | Purely temporary erections such as wooden structures. | 40% |
| Furniture & Fittings | ||
| S.No. | Particulars | Rate |
| Furniture and fittings including electrical fittings. | 10% | |
| Machinery & Plant | ||
| S.No. | Particulars | Rate |
| 1 | Machinery and plant other than those covered by sub-items (2), (3) and (8) below. | 15% |
| 2 (i) | Motor cars, other than those used in a business of running them on hire, acquired or put to use on or after the 1st day of April, 1990 except those covered under entry (ii). | 15% |
| 2 (ii) | Motor cars, other than those used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020. | 30% |
| 3 (i) | Aeroplanes – Aero engines. | 40% |
| 3 (ii) | (a) Motor buses, motor lorries and motor taxis used in a business of running them on hire other than those covered under entry (b). | 30% |
| (b) Motor buses, motor lorries and motor taxis used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020. | 45% | |
| 3 (iii) | Commercial vehicle which is acquired by the assessee on or after the 1st day of October, 1998, but before the 1st day of April, 1999 and is put to use for any period before the 1st day of April, 1999 for the purposes of business or profession. | 40% |
| 3 (iv) | New commercial vehicle which is acquired on or after the 1st October, 1998, but before the 1st April, 1999 in replacement of condemned vehicle of over 15 years of age and is put to use for any period before the 1st day of April, 1999 for the purposes of business or profession. | 40% |
| 3 (v) | New commercial vehicle which is acquired on or after the 1st April, 1999 but before the 1st April, 2000 in replacement of condemned vehicle of over 15 years of age and is put to use before the 1st April, 2000 for the purposes of business or profession. | 40% |
| 3 (vi) | New commercial vehicle which is acquired on or after the 1st April, 2001 but before the 1st April, 2002 and is put to use before the 1st day of April, 2002 for the purposes of business or profession. | 40% |
| 3 (via) | New commercial vehicle which is acquired on or after the 1st January, 2009 but before the 1st October, 2009 and is put to use before the 1st October, 2009 for the purposes of business or profession. | 40% |
| 3 (vii) | Moulds used in rubber and plastic goods factories. | 30% |
| 3 (viii) | Air pollution control equipment. | 40% |
| 3 (ix) | Water pollution control equipment. | 40% |
| 3 (x) | Solid waste control equipments & solid waste recycling and resource recovery systems. | 40% |
| 3 (xi) | Machinery and plant, used in semi-conductor industry covering all integrated circuits (ICs). | 30% |
| 3 (xia) | Life saving medical equipment. | 40% |
| 4 | Containers made of glass or plastic used as re-fills. | 40% |
| 5 | Computers including computer software. | 40% |
| 6 | Machinery and plant, used in weaving, processing and garment sector of textile industry, which is purchased & put to use under TUFS on or after the 1st April, 2001 but before the 1st April, 2004. | 40% |
| 7 | Machinery and plant, acquired and installed on or after the 1st September, 2002 in a water supply project or a water treatment system and which is put to use for the purpose of business of providing infrastructure facility. | 40% |
| 8 (i) | Wooden parts used in artificial silk manufacturing machinery. | 40% |
| 8 (ii) | Cinematograph films – bulbs of studio lights. | 40% |
| 8 (iii) | Match factories – Wooden match frames. | 40% |
| 8 (iv) | Mines and quarries. | 40% |
| 8 (v) | Salt works – Salt pans, reservoirs and condensers, etc., made of earthy, sandy or clayey material or any other similar material. | 40% |
| 8 (vi) | Flour mills – Rollers. | 40% |
| 8 (vii) | Iron and steel industry – Rolling mill rolls. | 40% |
| 8 (viii) | Sugar works – Rollers. | 40% |
| 8 (ix) | Energy saving devices: (a) Specialised boilers and furnaces. | 40% |
| (b) Instrumentation and monitoring system for monitoring energy flows. | 40% | |
| (c) Waste heat recovery equipment. | 40% | |
| (d) Co-generation systems. | 40% | |
| (e) Electrical equipment. | 40% | |
| (f) Burners. | 40% | |
| (g) Other equipment. | 40% | |
| 8 (x) | Gas cylinders including valves and regulators. | 40% |
| 8 (xi) | Glass manufacturing concerns – Direct fire glass melting furnaces. | 40% |
| 8 (xii) | Mineral oil concerns: (a) Plant used in field operations (above ground) distribution – Returnable packages. | 40% |
| (b) Plant used in field operations (below ground), but not including kerbside pumps including underground tanks and fittings used in field operations (distribution) by mineral oil concerns. | 40% | |
| (c) Oil wells not covered in clauses (a) and (b). | 15% | |
| 8 (ix) | Renewal energy devices. | 40% |
| 9 (i) | Books owned by assessees carrying on a profession. | 40% |
| 9 (ii) | Books owned by assessees carrying on business in running lending libraries. | 40% |
| Ships | ||
| S.No. | Particulars | Rate |
| 1 | Ocean-going ships including dredgers, tugs, barges, survey launches and other similar ships used mainly for dredging purposes and fishing vessels with wooden hull. | 20% |
| 2 | Vessels ordinarily operating on inland waters, not covered by sub-item (3) below. | 20% |
| 3 | Vessels ordinarily operating on inland waters being speed boats. | 20% |
| Intangible Assets | ||
| S.No. | Particulars | Rate |
| 1 | Know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature not being goodwill of business of profession. | 25% |
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To begin with, let me give you a brief explanation of both the terms i.e. Accounting policies and accounting principles- In order to maintain the financial statements, the company’s management adopts various Accounting Policies of its own. This generally includes the rules, the directions as to howRead more
To begin with, let me give you a brief explanation of both the terms i.e. Accounting policies and accounting principles-
In order to maintain the financial statements, the company’s management adopts various Accounting Policies of its own. This generally includes the rules, the directions as to how the financial statements will be prepared or how the valuation of depreciation would be done, and so on. These are flexible in nature and vary from company to company.
For Example 1, Johnson Co. uses FIFO (first in first out) method to value the inventory. That is to say that, while selling its product, it sells those goods or products which it has acquired or produced first.
It does not consider the LIFO or weighted average cost. The other company may adopt the other method as per its wish.
Example 2, Johnson Co. uses the straight-line method of depreciating an asset, whereas the other company can opt for a written down value method depending upon the need of the company.
So what I am trying to explain from this is that the accounting policies are flexible and can be adopted as per the needs of the company.
Accounting Principles are the rules which the accountants adopt universally for recording and reporting the financial data. It brings uniformity in accounting throughout the practice of accounting. These are generally less flexible in nature.
For Example, “Cost” is a principle. According to this accounting principle, an asset is recorded in the books at the price paid to acquire it and this cost will be the basis for all the subsequent accounting for the asset. However, asset market value may change over time, but for the accounting purpose, it continues to be shown at its book value i.e. at which it is acquired.
Some more examples would be of Matching principle, Consistency principle, Money measurement principle, etc.
Differences
Conclusion
The point is Accounting Principles are the broad direction to reach a goal and to reach that goal helps the accounting policies.
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