Depreciation Calculator

Income Tax Act — WDV rates by block of assets

An asset put to use for less than 180 days in the year gets half of the rate shown for that year.

Companies Act, Schedule II — useful lives

How do I calculate depreciation as per the Income Tax Act?

Group the asset into its block, take the opening written-down value of that block, add assets purchased during the year and subtract the sale value of assets sold, then apply the prescribed rate for the block. If an asset was put to use for less than 180 days in the year, only half the rate applies to it. Depreciation is always computed on the block as a whole, never asset by asset.

How do I calculate depreciation as per the Companies Act?

Schedule II gives a useful life rather than a rate. Under the straight line method, subtract the residual value from cost and divide by the useful life, giving the same charge every year. Under the written down value method, the rate is derived from the useful life and the residual value, and is applied to the reducing book value each year. Residual value is ordinarily capped at 5% of cost, and depreciation is charged pro rata from the date the asset is ready for use.

What is a written down value (WDV) calculator?

It works out depreciation as a fixed percentage of an asset’s reducing balance rather than of its original cost, so the charge is heaviest in the early years and tapers off. The Income Tax Act uses this method for every block of assets, and the Companies Act allows it as an alternative to the straight line method. Select the method above and this calculator reports the depreciation for the year along with the closing written down value to carry forward.

What is the difference between SLM and WDV?

The Straight Line Method (SLM) charges the same amount of depreciation every year, spreading the depreciable cost evenly over the asset's useful life. The Written Down Value (WDV) method charges a fixed percentage of the reducing book value, so depreciation is highest in the first year and falls each year after that.

What is WDV and a block of assets?

Written down value (WDV) is the cost of an asset less the depreciation already charged. Under the Income Tax Act, assets are grouped into blocks by type and rate, and depreciation is charged on the WDV of the whole block rather than each individual asset.

What is the 180-day half-depreciation rule?

Under the Income Tax Act, if an asset is put to use for less than 180 days in the year it is acquired, only half the normal depreciation rate is allowed for that year. The full rate applies from the next year.

What residual value should I use?

Under Schedule II of the Companies Act, residual value is generally taken as 5% of the original cost of the asset unless a different figure can be justified. The residual value is the amount expected to be realised at the end of the useful life and is not depreciated.

Can I use different methods for tax and books?

Yes. Depreciation for income tax is computed under the Income Tax Act using WDV block rates, while depreciation in the books of account follows the Companies Act (Schedule II) using SLM or WDV. The two are computed independently, so the figures usually differ.

Does the WDV rate match the example of about 45%?

For an asset costing ₹1,00,000 with a 5% residual value (₹5,000) and a 5-year life, the WDV rate works out to roughly 45.07% per year, since 1 − (5,000 ÷ 1,00,000)^(1/5) ≈ 0.4507.

Are these depreciation rates current?

The rates and useful lives shown here reflect commonly used figures but can change. Always verify the current rate for your asset with a CA, on incometax.gov.in or in Schedule II of the Companies Act before filing.