Depreciation on car as per income tax act?

The rate of depreciation on a car as per the Income Tax Act depends upon the purpose for which it has been purchased and the year on which it was acquired.

As per the Income Tax Act, cars come under the Plant and Machinery block of assets.

The Act classifies cars into two categories,

• Group 1 – Motor cars other than those used in the business of running them on hire.
• Group 2 – Motor taxis used in the business of running them on hire.

Group 1:

1. If the motor car is acquired and put to use on or after 23rd August 2019 but before 1st April 2020, then the rate applicable is 30%.
2. If the motor car is acquired and put to use on or after 1st April 1990, then the rate applicable is 15%. (All the cars which are not covered under the category (1) comes under this category.)

Group 2:

1. If the motor taxi is acquired and put to use on or after 23rd August 2019 but before 1st April 2020, then the rate applicable is 45%.
2. The rate applicable for motor taxis not covered under category (1) is 30%.

Here is a summarised version of the rates applicable to cars,

The rates can also be found on the Income Tax India website.