11/01/2019
BLOCK OF ASSETS [SEC 2(11)]: The term “block of assets” has been defined by section 2(11) to mean a group of assets falling within a class of assets, comprising :-
a) tangible assets,being buildings, machinery, plant or furniture;
b) intangible assets, being know-how, patents, copyrights, trademarks, licences. business or commercial rights of similar nature,
in respect of which the same percentage of depreciation is prescribed. A “block of assets” includes all units of the assessee having the Same rate of depreciation and not assets of only one unit. The user of the asset is important for the purpose of actual allowability of depreciation, but not for determining whether the asset falls within the block of assets or not.
There were 13 djfferent blocks of assets (up to the assessment year 2017-18). From the assessment year 2018-19, the maximum rate of depreciatiOn has been reduced to 40 per cent. Consequently, from the assessment year 2018-19, number of blocks ‘of assets are reduced as given below:-
1) Block 1 :- Building : Residential buildings other than hotels and boarding houses - 5%
2) Block 2 :- Buildings: Office, factory, godowns or buildings which are not mainly used for residential purpose [it covers hotels and boarding houses but does not cover those which are covered under Blocks 1 and 3] - 10%
3) Block 3 :- Buildings The following buildings:
a) (buildings acquired on or after September 1,2002 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 infrastructure facilities under clause (1) of sub-section (4) of section 80-IA;
b) temporary erections such as woodenstructures - 40%
4) Block 4 :- Furniture : Any furniture/fittings including electrical fittings 10%
5) Block 5 :- Plant and machinery : Any plant or machinery(not covered by Block 6, 7, 8, 9, 10, 1 1 or 12) and motor cars (other than those used in a businessof running them on hire) acquired or put to use on or after ApriI 1, 1990 - 15% Block
6) Block 6 :- Ocean : going ships, vessels ordinarily operating on inland waters including boats - 20%
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