Depreciation Calculator

Calculate depreciation as per Income Tax Act, Section 32 using Written Down Value (WDV) and Straight Line Method (SLM).

Section 32 — Depreciation Under Income Tax Act

Depreciation is an allowance for the wear and tear of assets used in business or profession. Key provisions under Section 32:

WDV Method: Depreciation is calculated on the written down value (opening balance minus accumulated depreciation). This is the most common method for Income Tax purposes.
SLM Method: Equal annual depreciation over the useful life. Preferred under Companies Act for financial reporting.
Partial Year: If an asset is acquired during the year, depreciation is allowed proportionately for the period of use. For IT purposes, assets used for less than 180 days get 50% of the normal depreciation.
Key Rates: Building (5%–10%), Furniture (10%), Plant & Machinery (15%), Computers (40%), Motor Vehicles (15%), Intangibles (25%).
Additional Depreciation: 20% (in addition to normal) for new plant & machinery installed in manufacturing undertakings.

About Depreciation Calculator

The Depreciation Calculator computes depreciation as per Section 32 of the Income Tax Act using both Written Down Value (WDV) and Straight Line Method (SLM). WDV is the most commonly used method for income tax purposes in India, where depreciation is calculated on the opening balance (cost minus accumulated depreciation) at prescribed rates. SLM is preferred under the Companies Act for financial reporting, where equal annual depreciation is charged over the asset's useful life.

Key depreciation rates under the Income Tax Act include: Building (5-10%), Furniture & Fittings (10%), Plant & Machinery (15%), Computers & Software (40%), Motor Vehicles (15%), and Intangible Assets (25%). For assets used for less than 180 days in the first year, only 50% of the normal depreciation is allowed. Additional depreciation of 20% is available for new plant and machinery installed in manufacturing undertakings. Our calculator handles all these scenarios with year-wise schedules for FY 2026-27.

Key Features

WDV and SLM computation side by side
All Income Tax prescribed depreciation rates
Partial year depreciation (less than 180 days)
Additional depreciation for manufacturing assets
Year-wise depreciation schedule

Frequently Asked Questions

What is the depreciation rate for computers under Income Tax Act?

The depreciation rate for computers and computer software under the Income Tax Act is 40% per annum under the WDV method. This is one of the highest depreciation rates, reflecting the rapid technological obsolescence of IT assets. For the first year, if the computer is used for less than 180 days, only 20% (50% of 40%) depreciation can be claimed.

What is the difference between WDV and SLM depreciation?

Under WDV (Written Down Value), depreciation is calculated on the opening balance (cost minus accumulated depreciation), so the depreciation amount decreases each year. Under SLM (Straight Line Method), equal depreciation is charged every year over the useful life. WDV results in higher depreciation in early years (beneficial for tax savings), while SLM provides consistent expense reporting. Income tax generally uses WDV; Companies Act allows both.

Depreciation Calculator