How this calculator works
The Income Tax Act depreciates assets using the Written Down Value (WDV) method — depreciation is calculated each year on the asset's reducing balance, not its original cost. The formula is: Depreciation = Opening WDV × block rate ÷ 100, and Closing WDV = Opening WDV − Depreciation.
If the asset was used for less than 180 days in the year it was acquired, the half-year rule applies: you can only claim half the normal rate for that year. So the formula becomes Depreciation = Opening WDV × block rate ÷ 100 × 0.5. From the following year onward, the full rate applies as usual.
Income Tax Act block rates
| Asset block | Rate |
|---|---|
| Buildings | 10% |
| Furniture & Fittings | 10% |
| Plant & Machinery | 15% |
| Computers & Software | 40% |
| Intangible Assets | 25% |
These are general block rates under the Income Tax Act. Some specific asset types within a block (e.g. certain machinery categories) can carry different rates — confirm the exact classification for your asset with your CA.
Shunya's CA team handles company registration and ongoing compliance, including getting your depreciation schedules right from day one.
See Company Registration Cost →What is the half-year rule?
If an asset is used for less than 180 days in the financial year it was acquired, you can only claim half the normal depreciation rate for that year. From the next year onward, the full rate applies as usual on the reduced (written down) value.
What is the WDV method?
WDV stands for Written Down Value. Under this method, depreciation is calculated each year on the asset's reducing balance — opening WDV for the year, not the original purchase cost — so the depreciation amount gets smaller every year as the asset's book value falls.
What's the depreciation rate for computers?
Computers and software are depreciated at 40% under the Income Tax Act — the highest common block rate, reflecting how quickly this category of asset becomes obsolete.
Is this the same as depreciation under the Companies Act?
No. The Companies Act calculates depreciation based on the useful life of an asset under a separate schedule, which is used for your statutory accounts. This calculator uses Income Tax Act block rates, which is what matters for your income tax return, not your company's financial statements.
This tool is for quick estimation only and is not a substitute for professional tax advice. For your specific situation, consult a practicing CA.
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