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Depreciation Calculator — Income Tax Act (WDV Method)

Depreciation claimed for income tax purposes under Section 32 rarely matches book depreciation, because the Income Tax Act mandates the Written Down Value (WDV) method applied to a full block of assets, with a special half-rate rule for assets used less than 180 days in the year. This calculator applies that logic directly — pick an asset block, enter the opening WDV, additions split by usage period, and any deletions, to get the depreciation claimable and the closing WDV to carry forward.

Block of Assets Details

Depreciation Computation (Section 32, WDV Method)

WDV before depreciation₹13,00,000
Depreciation @ 15% (opening + additions ≥180 days)₹1,80,000
Depreciation @ 7.5% (additions <180 days — half-rate rule)₹7,500
Total Depreciation Claimed₹1,87,500
Closing WDV (carried to next year)₹11,12,500

How this works

• Under the Income Tax Act, depreciation is computed on the entire "block of assets" (all assets in the same class at the same rate), not asset-by-asset.

• Assets put to use for 180 days or more in the year get the full rate; assets used for less than 180 days get exactly half the rate (Section 32 proviso).

• If the block's WDV goes to nil or negative after deletions, no depreciation is allowed — the difference is treated as a short-term capital gain/loss.

• Additional depreciation (Section 32(1)(iia)) for new plant & machinery in manufacturing, and any Section 43(6) adjustments for demergers/amalgamations, are not modelled here.

How It Works

  1. 1

    Pick the asset block and its rate

    Choose from preset rates — Building, Furniture, Plant & Machinery, Computers, Motor Vehicles — or enter a custom rate for any other notified block.

  2. 2

    Enter opening WDV, additions, and deletions

    Split additions into assets used 180 days or more (full rate) and less than 180 days (half rate), as required under the proviso to Section 32.

  3. 3

    Review depreciation claimed and closing WDV

    The closing WDV becomes next year's opening WDV for the same block, continuing the calculation year over year.

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Frequently Asked Questions

What is the WDV method of depreciation under the Income Tax Act?+
Under Section 32, depreciation for income tax purposes is computed using the Written Down Value (WDV) method applied to a "block of assets" — a group of similar assets depreciated at the same prescribed rate — rather than to individual assets as under the Companies Act.
What is the 180-day rule for depreciation?+
If an asset is put to use for 180 days or more in the year of purchase, full depreciation at the block's rate is allowed. If it is used for less than 180 days, only half the normal rate is allowed for that year, with the balance rate absorbed into the block's WDV for future years.
What happens if I sell an asset and the block WDV becomes negative?+
If sale proceeds from deletions exceed the opening WDV plus additions, the block is deemed to have ceased to exist, no depreciation is allowed for that year, and the excess is treated as a short-term capital gain under Section 50.
What are the standard depreciation rates for common asset blocks?+
Commonly used rates include: Residential buildings 5%, office/factory buildings 10%, furniture and fittings 10%, general plant and machinery 15%, motor vehicles 15%, and computers/computer software 40%. Specific categories (e.g. energy-saving devices, pollution control equipment) may have different notified rates.
Is additional depreciation included in this calculator?+
No. Additional depreciation under Section 32(1)(iia) for new plant and machinery used in manufacturing (typically an extra 20%, or 35% in notified backward areas) is not modelled here and should be computed separately by your CA where applicable.

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