# Depreciation Calculator (India) | Aalekh > Depreciation calculator for Schedule II useful lives and income-tax block rates. Compare SLM, WDV and the 180-day half-rate rule for FY 2026-27. Canonical URL: https://www.aalekh.ai/calculators/depreciation [All calculators](/calculators) For Chartered AccountantsRates reviewed September 2026 # Depreciation Calculator: Companies Act and Income Tax A depreciation calculator has to answer two separate questions for the same asset, because India runs two depreciation regimes side by side. For the financial statements, Schedule II to the Companies Act, 2013 prescribes useful lives and the company chooses straight line or written down value. For the tax computation, section 33 of the Income-tax Act, 2025 (section 32 of the 1961 Act) prescribes written down value depreciation on blocks of assets at rates set out in the prescribed rate table, historically Appendix I. The two almost never agree, and the gap is what generates deferred tax. Under Schedule II you depreciate cost less residual value over the prescribed useful life. Residual value cannot exceed 5 per cent of original cost unless the company discloses and technically justifies a different figure. The lives given are for single shift working: for assets not marked NESD, double shift working increases depreciation by 50 per cent and triple shift by 100 per cent for that period. Componentisation is mandatory for financial years beginning on or after 1 April 2015, so where a part of an asset is significant in cost and has a different useful life, that part is depreciated separately. Under the Income-tax Act you do not track individual assets at all. Assets of the same class and rate are pooled into a block, additions are added to the block, sale proceeds are deducted, and the rate is applied to the closing written down value. An asset acquired and put to use for less than 180 days in the tax year gets half the normal rate that year. Manufacturing and power generation businesses can claim a further 20 per cent additional depreciation under section 33(8) (section 32(1)(iia)) on new plant and machinery, again halved to 10 per cent if put to use for under 180 days, with the balance 10 per cent in the following year. Companies that have opted for the concessional regimes in section 200 or section 201 (sections 115BAA and 115BAB) forgo additional depreciation. ## Depreciation Calculator Method Companies Act Schedule II — straight lineCompanies Act Schedule II — written down valueIncome-tax block depreciation — section 33 (section 32) Asset class Drives the Schedule II useful life and the income-tax block rate. Residential buildingsNon-residential and factory buildingsFurniture and fittingsPlant and machinery, generalContinuous process plantMotor cars, not used in a hire businessComputers, laptops and softwareIntangible assets such as patents and trademarks Cost of the asset ₹ Residual value Schedule II caps this at 5% of original cost unless a different figure is disclosed and technically justified. % Useful life override Leave at 0 to use the Schedule II life for the selected class. years Date put to use Financial year end Depreciation for the year ₹12,667 Schedule II SLM, 15-year life Useful life appliedPlant and machinery, general 15 years Residual value5% of ₹6 lakh ₹30,000 Depreciable amountcost less residual value ₹5,70,000 Rate appliedstraight line 6.667% Period chargedput to use on 1 Dec 2026 4 months Depreciation for a full year ₹38,000 Depreciation for this year ₹12,667 Closing carrying amount ₹5,87,333 - Schedule II depreciation runs from the date the asset is ready for use and is charged pro rata, so this is the first-year figure for the asset. - Add 50% for double shift working or 100% for triple shift working on assets not marked NESD, and componentise any significant part with a different life. ## The formula Tax depreciation = (Opening WDV + Additions − Sale proceeds) × Prescribed rate | Book depreciation (SLM) = (Cost − Residual value) ÷ Useful life Opening WDV Written down value of the block of assets at the start of the tax year, determined under section 41 of the Income-tax Act, 2025. Prescribed rate The written down value rate for that block, for example 15 per cent for general plant and machinery and 40 per cent for computers, halved for assets put to use for under 180 days. Residual value Scrap value at the end of useful life under Schedule II, capped at 5 per cent of original cost unless a different figure is disclosed and justified. Useful life The life prescribed in Part C of Schedule II to the Companies Act, 2013, adjusted for shift working where the asset is not marked NESD. Depreciation for the books runs from the date the asset is ready for use and is charged pro rata for the part of the year, whereas the tax half-rate rule is a flat 50 per cent cut, not a day count. ## How to calculate it 1. 1 ### Fix the date the asset was put to use This single date drives both computations. For the books it starts the pro rata charge; for tax it decides whether the asset crosses 180 days in the tax year and therefore whether the full rate or half rate applies. 2. 2 ### Build the book charge under Schedule II Take cost, deduct residual value of up to 5 per cent, and spread the balance over the prescribed useful life using SLM or WDV as the company has elected. Apply componentisation where a significant part has a different life, and add 50 per cent for double shift or 100 per cent for triple shift working on assets not marked NESD. 3. 3 ### Group tax assets into blocks Pool every asset carrying the same rate into one block. Add the actual cost of additions, deduct money received on assets sold or discarded, and work on the net figure. Individual assets lose their identity once inside a block, so there is no asset-wise gain or loss until the whole block is extinguished. 4. 4 ### Apply the rate and the 180-day rule Apply the prescribed rate to the opening WDV and to additions used for 180 days or more. Apply half the rate to additions put to use for less than 180 days. The half rate applies only in the year of acquisition; from the next year the asset is inside the block at full rate. 5. 5 ### Add additional depreciation if eligible A business engaged in manufacture or production, or in generation, transmission or distribution of power, can claim 20 per cent of the actual cost of new plant and machinery under section 33(8). Second-hand assets, office appliances, road transport vehicles and plant installed in office or residential premises are excluded, and the deduction is not available under the concessional regimes. 6. 6 ### Reconcile the two figures Carry the difference between book depreciation and tax depreciation into the deferred tax working. Where tax depreciation exceeds the book charge the difference is taxable and creates a deferred tax liability. ## Depreciation benchmarks for FY 2026-27: income-tax block rates and Schedule II useful lives Depreciation benchmarks for FY 2026-27: income-tax block rates and Schedule II useful lives Asset class Income-tax rate (WDV) Schedule II useful life Residential buildings 5% 60 years (RCC frame structure) Non-residential and factory buildings 10% 30 years (factory building) Furniture and fittings 10% 8 to 10 years Plant and machinery, general 15% 15 years Continuous process plant 15% 25 years Motor cars, not used in a hire business 15% 6 to 10 years by vehicle type Computers, laptops and software 40% 3 years for end-user devices, 6 years for servers Intangible assets such as patents and trademarks 25% Amortised per AS 26 or Ind AS 38 ## Worked example Opening WDV, plant and machinery block ₹10,00,000 New machine acquired and put to use ₹6,00,000 on 1 December 2026 Business Manufacturing, default tax regime Schedule II useful life, SLM, residual 5% 15 years - Days of use for the new machine in FY 2026-27 is under 180, so the half-rate rule applies to it - Tax depreciation on opening WDV = ₹10,00,000 × 15% = ₹1,50,000 - Tax depreciation on the new machine = ₹6,00,000 × 7.5% = ₹45,000 - Additional depreciation under section 33(8) = ₹6,00,000 × 10% = ₹60,000, balance 10% allowed in FY 2027-28 - Total tax depreciation = ₹1,50,000 + ₹45,000 + ₹60,000 = ₹2,55,000 - Closing tax WDV = ₹10,00,000 + ₹6,00,000 − ₹2,55,000 = ₹13,45,000 - Book depreciation on the new machine = (₹6,00,000 − ₹30,000) ÷ 15 = ₹38,000 per year, charged for 4 months = ₹12,667 Tax depreciation ₹2,55,000 against a book charge of ₹12,667 on the new machine, a taxable difference that feeds the deferred tax liability ## Frequently asked questions What is the depreciation rate on computers as per income tax? Computers, laptops and computer software fall in a 40 per cent written down value block. If the machine is acquired and put to use for less than 180 days in the tax year, only half that rate, 20 per cent, is allowed in the first year. From the following year the asset sits inside the block and attracts the full 40 per cent on the block written down value. What is the 180-day rule in income-tax depreciation? Where an asset is acquired and put to use for less than 180 days in the tax year of acquisition, depreciation on that asset is restricted to 50 per cent of the normal rate for that year. It is a flat halving, not a day-count apportionment. The restriction applies only in the year of acquisition and also applies to additional depreciation, where the unclaimed 10 per cent is allowed in the immediately following year. Which section covers depreciation under the Income-tax Act, 2025? Depreciation is now section 33 of the Income-tax Act, 2025, which replaced section 32 of the Income-tax Act, 1961 from 1 April 2026. Additional depreciation is section 33(8), corresponding to section 32(1)(iia), and unabsorbed depreciation carry-forward is section 33(11), corresponding to section 32(2). The written down value and actual cost definitions sit in section 41. What is the residual value under Schedule II of the Companies Act, 2013? Schedule II provides that residual value ordinarily shall not be more than 5 per cent of the original cost of the asset. A company may adopt a lower residual value, or a different useful life, but it must disclose the deviation in the financial statements and support it with technical advice. The 5 per cent is a cap, not a mandatory figure. Is additional depreciation of 20 per cent still available? Yes. Section 33(8) of the Income-tax Act, 2025 continues the 20 per cent additional depreciation on new plant and machinery acquired and installed by a business engaged in manufacture or production, or in generation, transmission or distribution of power. It is not available on second-hand plant, office appliances, road transport vehicles, or to companies that have opted for the concessional regimes in section 200 or section 201. Can unabsorbed depreciation be carried forward indefinitely? Yes. Unabsorbed depreciation under section 33(11) of the Income-tax Act, 2025, formerly section 32(2), has no time limit and can be carried forward indefinitely. It can be set off against income under any head other than salary, which is wider than a business loss carried forward under section 112, formerly section 72, where the carry-forward is limited to eight years and set-off is confined to business income. Why is depreciation different under the Companies Act and the Income-tax Act? The Companies Act is trying to spread cost over the period the asset genuinely serves the business, so Schedule II works from useful lives and residual value and allows both SLM and WDV. The Income-tax Act is applying a statutory allowance, so it uses fixed rates on pooled blocks with no regard to actual useful life. The difference between the two charges is a timing or temporary difference and is accounted for as deferred tax. ## Sources Rates and rules on this page come from the following. This is a working aid, not professional advice: confirm anything material with your Chartered Accountant before you act on it. - [Schedule II, Companies Act, 2013 (useful lives to compute depreciation)](https://upload.indiacode.nic.in/schedulefile?aid=AC_CEN_22_29_00008_201318_1517807327856&rid=9) - [The Companies Act, 2013 (MCA bare Act)](https://www.mca.gov.in/content/dam/mca/pdf/CompaniesAct2013.pdf) - [AS 6, Depreciation Accounting (MCA notified text)](https://www.mca.gov.in/Ministry/notification/pdf/AS_6.pdf) ## Stop re-keying these figures Aalekh runs this calculation on your actual client data, pulls the underlying ledgers straight from Tally, and carries the result through to the financial statements and the return. [Get Started](/page-pricing)[Book a demo](/page-contact) ## Related calculators - [ ### DTA / DTL Calculator Work out deferred tax asset and liability from timing differences under AS 22 or Ind AS 12. 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