Third Schedule – Depreciation, initial and first-year allowance, amortisation
Sets the tax depreciation rates on the reducing balance of business assets, plus initial allowance, first-year allowance and amortisation of pre-commencement expenditure.
Who it applies to
Every business claiming tax depreciation on its assets
Rates and limits
| Item | Rate / rule |
|---|---|
| Buildings (all types) | 10% |
| Furniture, plant and machinery, motor vehicles, ships, technical books | 15% |
| Computer hardware, IT-manufacturing machinery, aircraft and aero engines | 30% |
| Offshore platforms and production installations (mineral oil) | 20% |
| Disability access ramp (up to Rs 250,000 each) | 100% |
| Initial allowance on plant and machinery (s.23) | 25% |
| First-year allowance (s.23B) | 90% |
| Pre-commencement expenditure (s.25) | 20% a year |
How it works in practice
Depreciation = rate × written-down value at the start of the year. In the year of acquisition, the initial allowance (or first-year allowance where eligible) is deducted first. The cost of a passenger vehicle not plying for hire is capped at Rs 7.5 million (s.22(13)(a)).