A depreciation schedule will help you pay less tax. The amount the depreciation schedule says you can claim effectively reduces your taxable income.
The depreciation schedule is made up of two components;
- Capital Works Deduction and
- Plant and Equipment
A capital works deduction relates to the structural element of a building. Residential properties built after 1987 are eligible to claim a deduction of 2.5% over the specified term of 40 years.
Plant and Equipment are removable assets such as carpets, curtains, heaters, hot water system, stoves, air conditioning units, etc.