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An eligible manufacturer under the ordinary tax regime puts ₹30 lakh of qualifying new machinery to use for at least 180 days in tax year 2026–27. It also puts ₹40 lakh of qualifying new machinery…

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An eligible manufacturer under the ordinary tax regime puts ₹30 lakh of qualifying new machinery to use for at least 180 days in tax year 2026–27. It also puts ₹40 lakh of qualifying new machinery and ₹10 lakh of used machinery in the same 15% block to use for fewer than 180 days. What is total ordinary and additional depreciation for that year under section 33, assuming no other block movements?

  1. ₹24.50 lakh

  2. ₹9.40 lakh

  3. ₹18.25 lakh

  4. ₹17.50 lakh

Answer and explanation

Correct answer: C - ₹18.25 lakh

Ordinary depreciation is 15% of ₹30 lakh plus half that rate on the ₹50 lakh used for under 180 days (section 33(4)), or ₹8.25 lakh. Additional depreciation under section 33(8) and (9) is 20% of ₹30 lakh plus 10% of the ₹40 lakh of new machinery, the other 10% being allowed next year, or ₹10 lakh; used machinery does not qualify. The total is ₹18.25 lakh.

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