Singapore legislation
Clause 8
Clause 8
Amendment of section 19
Section 19 of the principal Act is amended by deleting subsection (2) and substituting the following subsection: —“(2) Where at the end of the basis period for any year of assessment a person has in use machinery or plant for the purpose of his trade, profession or business, there shall be made to him, on due claim, in respect of that year of assessment an allowance for depreciation by wear and tear of those assets (to be known as an annual allowance) which shall be calculated in accordance with the following provisions: —
the annual allowance in respect of any machinery or plant acquired in or after the basis period for the year of assessment 1981 shall —
in the case of an asset, other than an asset acquired under a hire-purchase agreement, be the amount ascertained by dividing the excess of the original cost of the asset over any initial allowance granted under subsection (1) by the number of years of working life of the asset as specified in the Sixth Schedule to this Act;
in the case of an asset acquired under a hire-purchase agreement, be the amount ascertained by dividing the excess of the original cost of the asset over the total amount of initial allowance allowable in respect of the asset under subsection (1) by the number of years of working life of the asset as specified in the Sixth Schedule to this Act;
the annual allowance in respect of any machinery or plant acquired before the basis period for the year of assessment 1981 shall be the amount ascertained by the formula where Ais the amount of the capital expenditure still unallowed under this section in respect of that asset as at the end of the basis period for the year of assessment 1980;Bis the number of years of working life of the asset as specified in the Sixth Schedule to this Act reduced by the number of whole years the asset has been put into use as at the end of the basis period for the year of assessment 1980, and if the result is less than 1, B shall be deemed to be 1; andwhere A or Bcannot be ascertained, such amount as the Comptroller may determine;
notwithstanding paragraphs (a) and (b), the annual allowance in respect of any asset for any year of assessment may, at the election of a person to whom a certificate has been issued before 1st January, 1981, (or after 1st January, 1981, where application for the certificate has been approved before that date) under Part II, III, IV, IVA, VIB or VIC of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 135), be ascertained during his tax relief period as determined in accordance with that certificate at the rates applicable immediately before the commencement of the Income Tax (Amendment No. 2) Act, 1980, and shall be computed on the reducing value of the asset, which shall be the original cost of the asset reduced by any initial allowance and annual allowances granted under this section;
where an election under paragraph (c) has been made by a person with respect to any asset, the annual allowance in respect of the same asset to be made to the person for any year of assessment after his tax relief period shall be computed in accordance with the formula where Cis the amount of the capital expenditure still unallowed under this section in respect of that asset after the end of his tax relief period;Dis the number of years of working life of the asset as specified in the Sixth Schedule to this Act reduced by the number of whole years the asset has been put into use as at the end of the basis period in which his tax relief ends and if the result is less than 1, D shall be deemed to be 1;
the annual allowance in respect of any asset for any year of assessment shall not exceed the amount of the capital expenditure of the asset still unallowed under this section as at the beginning of the basis period for that year of assessment;
for the purposes of the Sixth Schedule to this Act, where any question arises as to the classification of an asset under any item of that Schedule, the asset shall be treated as falling under such item as the Comptroller considers proper.”.