About the Depreciation (WDV vs SLM)
Depreciation is charged differently for tax and for the books. The Income-tax Act uses the written-down-value (WDV) method with block rates — 15 % on general plant and machinery, 40 % on computers and software, 10 % on buildings and furniture — and halves the first year's charge if the asset is used for less than 180 days. The Companies Act 2013 instead prescribes useful lives in Schedule II, and most companies write the cost less a 5 % residual off in equal straight-line (SLM) instalments over that life.
This calculator shows both schedules side by side for the asset class and cost you enter, year by year: the tax depreciation you can claim and the book depreciation your accounts will show. The gap between them is why deferred tax appears in company accounts.
The rates and lives are the notified figures on the date shown under the tool; a Control Center override replaces them without a deploy. Special rates — additional depreciation for new manufacturing plant, accelerated rates for certain assets — are not modelled.
How to use it
- 1Pick the asset class — plant & machinery, computers, buildings, furniture or vehicles.
- 2Enter the cost and the number of years to project.
- 3Tick 'used less than 180 days in year one' if the asset was bought late in the year.
- 4Read the WDV (tax) and SLM (books) charge for each year and the closing values.
How this is calculated
WDV (Income-tax): depreciation for the year = opening WDV × block rate (half the rate in year one if used < 180 days); closing WDV = opening − depreciation SLM (Companies Act): yearly depreciation = (cost − residual value) ÷ useful life, with residual value 5 % of cost
Rates used
- IT Act depreciation — plant & machinery (WDV)15 % · Income-tax Rules, Appendix I · verified 2026-09-25 · owner to confirm
- IT Act depreciation — computers & software (WDV)40 % · Income-tax Rules, Appendix I · verified 2026-09-25 · owner to confirm
- IT Act depreciation — buildings (WDV)10 % · Income-tax Rules, Appendix I · verified 2026-09-25 · owner to confirm
- IT Act depreciation — furniture (WDV)10 % · Income-tax Rules, Appendix I · verified 2026-09-25 · owner to confirm
- IT Act depreciation — motor vehicles (WDV)15 % · Income-tax Rules, Appendix I · verified 2026-09-25 · owner to confirm
- Companies Act useful life — plant & machinery15 years · Companies Act 2013, Schedule II · verified 2026-09-25 · owner to confirm
- Companies Act useful life — computers3 years · Companies Act 2013, Schedule II · verified 2026-09-25 · owner to confirm
- Companies Act useful life — buildings30 years · Companies Act 2013, Schedule II · verified 2026-09-25 · owner to confirm
- Companies Act useful life — furniture10 years · Companies Act 2013, Schedule II · verified 2026-09-25 · owner to confirm
- Companies Act useful life — motor vehicles8 years · Companies Act 2013, Schedule II · verified 2026-09-25 · owner to confirm
- Companies Act residual value5 % of cost · Companies Act 2013, Schedule II · verified 2026-09-25 · owner to confirm
Frequently asked questions
Why does the tax figure keep falling every year while the book figure is flat?
WDV applies the rate to the reduced balance, so the charge shrinks each year and the asset is never fully written off. SLM spreads the depreciable amount evenly, so the charge is the same every year until the useful life ends.
What if the asset was bought in the second half of the year?
Under the Income-tax Act an asset used for less than 180 days in the year of purchase gets half the normal rate that year. Tick the option and the first year's WDV charge halves; the Companies Act instead pro-rates from the date the asset is ready for use, which the tool approximates with a full first year.
Can a proprietorship or partnership use the Companies Act schedule?
The Companies Act applies to companies. Other entities generally follow the Income-tax rates in their books as well, though a firm may adopt any reasonable method. The side-by-side view still helps a firm see the book-versus-tax difference a lender's analyst will look at.
Are the rates current?
They are the notified rates on the date printed under the tool, and the admin can update them. Budgets and notifications change them from time to time; confirm the rate for your block in the current Income-tax Rules before filing.