Question 1

What are the income-tax depreciation rates?

Accepted Answer

Written-down value rates under Rule 5 and Appendix I: residential buildings 5%, other buildings 10%, furniture and fittings 10%, plant and machinery 15%, motor cars 15%, motor vehicles used in a hire business 30%, computers and software 40%, intangible assets such as patents and goodwill-type rights 25%. Some specific assets have higher rates; the calculator covers the common blocks.

Question 2

What is the 180-day rule?

Accepted Answer

If an asset is acquired and put to use for less than 180 days in the year of purchase, only half the normal rate is allowed for that year. The full rate applies from the next year. The test is days of use in the financial year, so an asset put to use on 3 October gets half depreciation for that year.

Question 3

How does the block of assets system work?

Accepted Answer

Depreciation is computed on the written-down value of the whole block, not asset by asset. Additions during the year enter the block; sale proceeds of any asset in the block reduce it. If the block becomes negative, the excess is short-term capital gain; if the block is empty but a balance remains, that balance is a short-term capital loss.

Question 4

Is depreciation different under the Companies Act?

Accepted Answer

Yes. The Companies Act uses useful lives under Schedule II with either straight-line or WDV, and the rates differ from income tax. Books are kept under the Companies Act; the income-tax computation is a separate adjustment in the return. This calculator is for the income-tax computation.

Question 5

Can I claim additional depreciation?

Accepted Answer

Manufacturing businesses get an additional 20 percent on new plant and machinery in the year of purchase under Section 32(1)(iia), halved to 10 percent if used for under 180 days, with the balance 10 percent in the next year. It is not available on second-hand assets, vehicles, or office equipment. The calculator has a toggle for it.

Income Tax Depreciation Calculator

The depreciation figure for the tax computation

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