Depreciation Calculator

Income-tax depreciation for AY 2026-27 is the block rate × (opening WDV + additions − sale proceeds), computed on the block of assets under Section 32 read with Appendix I of the Income-tax Rules, 1962 — with additions put to use for fewer than 180 days earning only half the rate in that first year. That one sentence is the whole formula; everything else is knowing your block’s rate and applying two special rules (the 180-day proviso and Section 50 on sales).

This calculator runs both of the computations an Indian business actually needs: income-tax mode for the Section 32 WDV block figure that goes into your return, and books mode for Companies Act, 2013 Schedule II depreciation (SLM or WDV over useful life) that goes into your financial statements. The two are different laws with different numbers — this page keeps them strictly apart, and so should you.

The WDV block rates below are from Appendix I of the Income-tax Rules, 1962, as in force for AY 2026-27 (verified 27-07-2026). The calculator pre-fills these when you pick a block — the table and the tool read the same pinned constants:

• Buildings — residential: 5%
• Buildings — office, factory or godown (non-residential): 10%
• Buildings — purely temporary erections: 40%
• Furniture and fittings (including electrical fittings): 10%
• Plant and machinery — general: 15%
• Motor cars (not used in a hire business): 15%
• Motor buses, lorries and taxis used in a hire business: 30%
• Computers including computer software: 40%
• Ships: 20%
• Energy-saving, renewable-energy and pollution-control equipment: 40%
• Intangible assets — know-how, patents, copyrights, trademarks, licences, franchises: 25%

Two footnotes matter. Goodwill is not on this list: the Finance Act, 2021 removed goodwill of a business or profession from the intangibles block (see the FAQ). And the Income-tax Act, 2025 — effective 1 April 2026 — re-enacts the depreciation provision as its new Section 33 — the rates themselves live in the rules and carry forward unchanged into Tax Year 2026-27.

Section 32 depreciates the block, not the asset. All assets carrying the same rate pool into one WDV; purchases increase it, sale proceeds decrease it, and the rate applies to the net. A worked example from this calculator’s engine, computers block at 40%:

• Opening WDV ₹3,00,000 + new computers ₹2,00,000 (put to use ≥ 180 days) = base ₹5,00,000.
• Depreciation = 40% × ₹5,00,000 = ₹2,00,000; closing WDV ₹3,00,000.
• Next year at the full rate the block earns ₹1,20,000 — the 5-year projection table below the calculator shows the whole declining curve.

The 180-day rule (second proviso to Section 32(1)): additions put to use for fewer than 180 days in the year earn half the rate for that year only — exactly 180 days still gets the full rate. Plant and machinery at 15%, from the engine:

• Opening WDV ₹10,00,000, additions ₹4,00,000 put to use in January (fewer than 180 days).
• Depreciation = 15% × ₹10,00,000 + 7.5% × ₹4,00,000 = ₹1,50,000 + ₹30,000 = ₹1,80,000; closing WDV ₹12,20,000.
• Had the machines run from April, the year’s claim would be ₹2,10,000 — the half-rate rule defers exactly ₹30,000 to later years; it is not lost.

One more thing the block system implies: depreciation is mandatory. Explanation 5 to Section 32(1) charges it whether or not you claim it, so skipping a year quietly shrinks your WDV anyway.

Manufacturers and power-generation businesses get an extra 20% of the actual cost of new plant and machinery in the year it is first put to use, on top of normal block depreciation. The half-year logic applies here too: machinery used for fewer than 180 days gets 10% now and the balance 10% in the immediately following year.

The carve-outs are strict: no additional depreciation on second-hand machinery, office appliances, road-transport vehicles, or ships and aircraft. And it vanishes entirely under the concessional-rate elections — companies under Section 115BAA/115BAB, and individuals/HUFs or co-operatives under 115BAC/115BAD, forgo it as part of the deal.

This calculator deliberately does not take additional-depreciation inputs: whether you get it depends on your regime election, and a tool that guessed would be wrong for exactly the businesses most likely to use it. Run the block figure here; let your CA layer Section 32(1)(iia) on top if your election allows it.

Sale proceeds reduce the block before depreciation is computed. When proceeds are equal to or more than the opening WDV plus the year’s additions, the block is extinguished: no depreciation at all, and the excess is a deemed short-term capital gain under Section 50 — short-term by definition, however long the assets were held. From the engine, plant and machinery at 15%:

• Opening WDV ₹2,00,000, no additions, machinery sold for ₹3,50,000.
• Depreciation: ₹0 — block extinguished.
• Deemed short-term capital gain under Section 50: ₹1,50,000.

The calculator clamps this correctly — depreciation can never go negative — and flags the Section 50 state in the result instead of printing a meaningless figure. The mirror case also exists: if the block ceases to exist because every asset was transferred, any shortfall of proceeds below WDV is a short-term capital loss under the same section.

Schedule II of the Companies Act, 2013 governs your books, not your tax return. Instead of prescribed rates it prescribes useful lives, over which you depreciate to a residual value (ordinarily capped at 5% of cost) using either the straight-line method or the written-down-value method. Indicative Part C lives (verified 27-07-2026):

• Computers and laptops (end-user devices): 3 years
• Servers and networks: 6 years
• Plant and machinery — general: 15 years
• Furniture and fittings: 10 years
• Motor cars (not used in a hire business): 8 years
• Factory buildings: 30 years

SLM charges (cost − residual) ÷ life every year. From the engine: a ₹90,000 laptop, 5% residual (₹4,500), 3-year life → ₹28,500 per year, closing exactly at ₹4,500 after year 3.

WDV derives the rate that lands on the residual at the end of life: rate = 1 − (residual ÷ cost)^(1/life). A ₹10,00,000 motor car, 5% residual, 8-year life → about 31.23% per year on the carrying amount, so roughly ₹3.12 lakh in year 1, declining thereafter and never dipping below the ₹50,000 residual. The full year-wise schedule renders below the calculator.

Never mix the tables. Books depreciation and income-tax depreciation will differ for the same asset in the same year — that difference is expected, and it is what deferred-tax accounting exists to bridge. Filing an ITR with Schedule II lives, or publishing accounts on Appendix I rates, are both errors.

ReadyBooks posts monthly SLM/WDV book depreciation automatically from the fixed-asset register — day-prorated from each asset’s put-to-use date, with opening-asset onboarding for legacy assets and disposal handling that previews the Section 18(6) GST payable. No spreadsheet, no month-end journal to remember: the register mints per-unit asset rows straight from your purchase bills and the depreciation journal posts itself.

For income-tax, the register’s IT block summary supplies the year’s movement only — additions with put-to-use dates and disposals per block — deliberately without an opening block WDV, because that figure lives in your prior-year return and your CA brings it from there. The full Section 32 block computation (180-day rule, Section 50 handling) runs in the ReadyBooks CA module against source-pinned rate versions. The register does not compute full income-tax depreciation — the summary feeds the CA who does.