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 passeng
