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Depreciation Rates
What are the rates of Depreciation for old and used items and how to calculate the same ?
Though there are no specific guidelines in the Baggage Rules for according depreciation benefits to old and used items of baggage for the purpose of their valuation, as a matter of practice, the following depreciation benefits are given on the purchase value of old and used items :

(i) For every quarter during 1st year - 4%
(ii) For every quarter during 2nd year - 3%
(iii) For every quarter during 3rd year - 2.5%
(iv) For every quarter during 4th year -  and thereafter 2%

In case of cars the maximum depreciation given is 70%. For other items, the assessing officer uses his / her judgement and discretion for determining the maximum limit. The depreciation for each year is supposed to be calculated on the reduced value of the previous year and not on the original value. However, for quick calculation and clearance, usually the straight line method of calculation of depreciation is followed at the airport, which incidentally is more beneficial for the passenger.
Example : Suppose a passenger is bringing an item purchased in January 1998 at a cost of USD 5000. We want to calculate the depreciation during November 2003.

For February 1998 - January 1999 depreciation would be 16% (for 12 months, i.e. 4 quarters)
For February 1999 - January 2000 depreciation would be 12% (for 12 months, i.e. 4 quarters)
For February 2000 - January 2001 depreciation would be 10% (for 12 months, i.e. 4 quarters)
For February 2001 - January 2002 depreciation would be 8% (for 12 months, i.e. 4 quarters)
For February 2002 - January 2003 depreciation would be 8% (for 12 months, i.e. 4 quarters)
For February 2003 - October 2003 depreciation would be 6% (for 9 months, i.e. 3 quarters)

Thus, total depreciation would be 60% and hence the depreciated value on November 2003 would be {USD 5000 - (60% of USD 5000)} = USD 2000. This value is to be taken into consideration for duty purposes, after converting it to Indian Rupees at the current rates.
Since computers depreciate at a faster rate than other items, special rates are usually applied while depreciating old and used computers. Since Baggage Rules do not have any guidelines regarding the depreciation rates for computers, the rates applicable for other import goods are usually followed. As per CBEC Circular no. 27/98-Cus dt.21.4.98 issued in another context, the rates of depreciation for computers are as follows :

(i) For every quarter during 1st year - 7%
(ii) For every quarter during 2nd year - 7%
(iii) For every quarter during 3rd year - 5%
(iv) For every quarter during 4th year -  and thereafter 3%  Subject to an overall limit of 90%