Depreciation Calculator
Calculate depreciation under the Income Tax Act (WDV block rates) or the Companies Act (Schedule II useful life) — SLM or WDV method.
How is depreciation calculated?
Under the Income Tax Act, depreciation is charged on the written-down value (WDV) of a block of assets at prescribed rates — for example 15% for general plant & machinery, 10% for buildings and 40% for computers. A half-year rule applies: if an asset is put to use for less than 180 days in the year, only half the normal rate is allowed for that year.
Under the Companies Act, depreciation follows Schedule II, which prescribes the useful life of each asset rather than a rate. You can use the Straight Line Method (SLM), which spreads the depreciable amount evenly over the life, or the Written Down Value (WDV) method, which charges a fixed percentage of the reducing book value each year. A residual value — usually 5% of cost under Schedule II — is left un-depreciated at the end of the useful life.
These rates and useful lives change from time to time. Confirm the current figures with a CA, on incometax.gov.in or in Schedule II of the Companies Act before relying on them.
Frequently asked questions
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.