Depreciation Calculator — WDV & SLM Method
Calculate asset depreciation as per Income Tax Act (WDV method) or Companies Act (SLM method). Get year-by-year depreciation schedule.
Asset Details
WDV: Depreciation applies on the written-down value each year. Commonly used for income tax purposes.
Depreciation Summary
WDV vs SLM
WDV: Depreciation on reducing balance — higher in early years.SLM: Equal depreciation every year — simpler calculation.
Extract asset data from purchase invoices automatically with AccuRaik.
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* Tax saving estimated at 30% tax rate (indicative only).
Depreciation Rates — Income Tax Act
| Asset Type | WDV Rate |
|---|---|
| Residential buildings | 5% |
| Non-residential buildings | 10% |
| Temporary wooden / bamboo structures | 40% |
| Furniture & fittings | 10% |
| General plant & machinery | 15% |
| Motor cars (not used in hire) | 30% |
| Computers & peripherals / software | 40% |
| Ships | 20% |
| Aircraft | 40% |
| Patents, trademarks, know-how, copyright | 25% |
| Energy-saving devices | 40% |
| Air pollution / water pollution control equipment | 100% |
The Definitive Guide to Depreciation in India
Depreciation is the systematic reduction in the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. For businesses in India, calculating depreciation accurately is critical for two reasons: measuring the true profit of a business (under the Companies Act) and claiming tax deductions (under the Income Tax Act).
1. Written Down Value (WDV) vs. Straight Line Method (SLM)
Written Down Value (WDV)
Under WDV, depreciation is calculated on the book value of the asset at the beginning of the year. This results in higher depreciation in the initial years and lower depreciation later. This method is mandatory for Income Tax purposes.
Straight Line Method (SLM)
Under SLM, depreciation is calculated on the original cost of the asset. The depreciation amount remains constant every year. It is simpler to calculate and is often used for internal financial reporting.
2. Block of Assets Concept (Income Tax Act)
Unlike the Companies Act where depreciation is calculated on individual assets, the Income Tax Act calculates depreciation on a "Block of Assets". A block of assets refers to a group of assets falling within a class of assets (e.g., tangible assets like buildings, machinery, plant, or furniture) for which the same rate of depreciation is prescribed. For example, all computers and software (40% rate) form one block.
3. Managing Asset Purchases and Capitalization
When a business purchases a large fixed asset, the invoice data (vendor, date, cost, GST) must be carefully recorded and capitalized in the accounting software (like Tally) rather than expensed. Manual entry of complex capital goods invoices often leads to errors in calculating the exact base cost (excluding ITC claimed). AccuRaik's OCR automation extracts these purchase invoices instantly, allowing CAs to accurately classify the asset into the correct block for WDV depreciation.
Frequently Asked Questions
What is the WDV method of depreciation?
What is the SLM method of depreciation?
Can a company use both WDV and SLM?
What is the depreciation rate for computers under Income Tax Act?
How is depreciation calculated if an asset is used for less than 180 days?
Is depreciation allowed on Land?
What is Additional Depreciation?
How does selling an asset affect the block of assets?
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