Additional Depreciation Benefits For Power Generation & Distribution Companies

Section 32 provides for additional depreciation on new plant and machinery (other than ships and aircrafts), which has been acquired and installed by a company engaged in the business of manufacture or production of any article or thing on or after the 31st day of March, 2005.


The assessee is allowed an additional depreciation of 20% on actual cost of new plant and machinery being acquired or installed. However, if the asset is not put to use for 180 days in the year of acquisition then the additional rate of depreciation provided shall be 10 % on the actual cost thereon.


Provided further that no additional depreciation shall be provided on –

  1. Second hand plant & machinery.
  2. Machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest house.
  3. Any office appliances or road transport vehicles.
  4. Any plant or machinery on which the entire actual cost has been claimed as depreciation.(for instance, 100% deduction is generally claimed on cost of pollution control equipments)
  5. Ships or aircraft.


Amendment has been proposed w.e.f. 1st day of April, 2013 which provides that additional depreciation shall now be availed by companies engaged “in the business of generation and distribution of power”.


The amendment has been put into force with a view to allow power generation & distribution companies to avail tax benefits out of extensive wear & tear of the following equipments:

  • Fuel Control Panel
  • Diesel Fuel Control Valve
  • Gas Control Valve
  • Gas Power Valve
  • Manual Gas Valve
  • Gas Solenoid Valve
  • Air-Gas Mixer
  • Gas Pressure Regulator
  • Natural Gas Pressure Transducer Manifold Air Pressure Transducer Engine Vacuum Transducer(s) EGT Thermocouples, and so on.

With a tremendous population pressure at stake for consumption of electricity, the Govt. finds no alternate choice than to allow enhanced depreciation benefits to organizations like NTPC, CESC, NHPC, Adani Power, JSW Energy & other big names on the block, owing to the genuineness of claim with a 24*7 production schedule.




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