Depreciation Calculator

WDV for Tax, SLM for Books — Not Interchangeable

Income tax depreciation in India is computed almost exclusively on the Written Down Value (WDV) method, applied to a block of assets rather than asset-by-asset — you generally can't choose SLM for your income tax return. SLM is the method used for company financial statements under the Companies Act, based on each asset's prescribed useful life. The two methods are calculated differently, use different rate tables, and serve different purposes — don't file WDV-shaped tax figures using the Companies Act SLM percentages shown here, or vice versa.

This calculator lets you toggle between them to compare, but the SLM output is for book/accounting depreciation, not a valid income-tax computation.

Worked Example

₹10,00,000 Plant & Machinery, 5-year projection, WDV (15%) vs SLM (5.27%):

WDV front-loads depreciation — larger deductions early, tapering off as book value shrinks. SLM spreads a fixed rupee amount evenly every year. Over the full life of the asset both methods depreciate the same total value, but WDV gives you a bigger tax deduction sooner, which is generally more valuable due to the time value of money.

Depreciation Is Calculated on a Block, Not Per Asset

For income tax purposes, similar assets (all Plant & Machinery, for instance) are grouped into a single "block" with one WDV balance, rather than each item depreciated individually. Buying a new asset in the same block adds to that block's value; selling one reduces it. This calculator models a single asset in isolation, which is useful for estimating the deduction on one purchase, but your actual tax depreciation depends on your entire block's combined WDV, including assets you already owned.

Additional Depreciation and Timing Rules

New plant and machinery used in manufacturing can qualify for additional depreciation on top of the normal rate, subject to conditions. Also note the half-year rule: an asset put to use for less than 180 days in the year of purchase gets only half the normal depreciation rate for that first year, with the full rate applying from the following year. This calculator doesn't model either of these — factor them in separately if they apply to your situation.

What Happens When You Sell an Asset From a Block

Because depreciation is tracked at the block level, selling an asset doesn't trigger a separate capital-gains-style computation on that one item the way selling a standalone investment does. Instead, the sale proceeds are deducted from the block's opening WDV (plus any additions during the year) before that year's depreciation is calculated on the reduced balance. Two distinct situations can arise from this:

• If the block still has a positive balance and still contains other assets after the deduction, depreciation for the year continues to be computed on that reduced WDV — no gain or loss is separately recognised at that point.
• If the sale proceeds exceed the block's WDV, or the block becomes empty (no assets remain in it) after the sale, the excess or remaining balance is generally treated as a short-term capital gain rather than adjusted through further depreciation.

This calculator models a single asset's depreciation in isolation and doesn't simulate a mid-life sale or a block emptying out — treat any sale of a depreciated business asset as needing its own computation against your actual block balance.

Common Asset Categories and Indicative Rates

The rates used in this calculator's dropdown are illustrative figures for common asset categories. Actual applicable rates depend on the precise asset description and classification in the relevant schedule, and rates are periodically revised — always verify the current rate for your specific asset before filing.

Because rate tables are revised from time to time and eligibility depends on how an asset is classified, treat the figures above and in the calculator as a starting point for estimation, not a substitute for checking the current schedule against your specific asset.

Claiming Depreciation Is Mandatory, Not Optional

A point that trips up many first-time business filers: income tax depreciation is deemed to be allowed whether or not you actually claim it in your computation — the block's WDV is reduced by the eligible depreciation for the year regardless of whether you chose to claim the deduction. This means you can't skip claiming depreciation in a loss year to "save" a bigger deduction for a future profitable year; the WDV carries forward net of that year's depreciation either way, so declining to claim it simply forfeits the deduction rather than deferring it.

This is a meaningful difference from some other deductions that genuinely can be deferred or carried forward at the taxpayer's choice — depreciation isn't one of them, so claim it in full each year rather than leaving it unclaimed.

When a Block's WDV Runs Down to a Small Balance

Because WDV depreciation is a percentage of a shrinking balance, it mathematically never reaches exactly zero on its own — the deduction gets smaller each year but the block always retains some residual balance unless assets are sold out of it. In practice, a block with a very old, mostly-depreciated set of assets often carries a small WDV figure for years, generating a correspondingly small annual deduction. This is normal and doesn't indicate an error in the calculation — it's a structural feature of the reducing-balance method, and it's one more reason blocks with old assets and blocks with recent purchases should be tracked separately when you're trying to understand what's driving your current year's depreciation deduction.

Depreciation on Assets Used Partly for Business, Partly Personally

Where an asset — commonly a vehicle, or a portion of a home used as an office — is used partly for business and partly for personal purposes, the depreciation otherwise allowable on that asset is typically restricted to a reasonable proportion reflecting business use, rather than the full amount being claimed regardless of personal use. There's no single fixed percentage prescribed for every situation; what counts as a "reasonable" business-use proportion is assessed on the specific facts, and is a common point of scrutiny precisely because it relies on judgment rather than a mechanical formula. This calculator assumes 100% business use of the asset entered — if your actual usage is mixed, apply your own reasonable business-use percentage to the deduction this tool produces rather than claiming the full figure.

Depreciation for Intangible Assets Is Real, Not Just a Formality

It's a common assumption that depreciation only applies to physical assets like machinery or buildings, but know-how, patents, copyrights, trademarks, licences, franchises, and similar business or commercial rights of a similar nature are also eligible for depreciation as a distinct block of intangible assets, at their own prescribed rate. This is frequently missed in smaller business computations, where the cost of acquiring a franchise right or a software licence gets treated as a straight expense or entirely overlooked for depreciation purposes, rather than capitalized and depreciated over time the way the law actually requires. If your business has paid for a right of this kind, check whether it belongs in the intangible block before assuming it isn't depreciable at all.