How it works
Books, straight line (SLM): yearly charge = (cost − residual value) ÷ useful life. Residual value is at most 5% of cost (Schedule II, Part A).
Books, written down value (WDV): rate = 1 − (residual ÷ cost)1 ÷ life, applied to the opening book value each year. With a 5% residual and a 3-year life, the rate is about 63.16%.
First year in the books: pro rata for the days used, from the date the asset is added.
Income tax: WDV at the block rate; half the rate in the first year if the asset is used for less than 180 days in that year.
| Asset | Schedule II useful life | Income-tax block rate |
|---|---|---|
| Laptops, desktops | 3 years | 40% |
| Servers and networks | 6 years | 40% |
| Plant and machinery (general) | 15 years | 15% |
| Furniture and fittings | 10 years | 10% |
| Office equipment | 5 years | 15% (plant and machinery) |
| Motor car, not on hire | 8 years | 15% |
| Bus, lorry, taxi on hire | 6 years | 30% |
| Factory building | 30 years | 10% |
| Office building, RCC frame | 60 years | 10% |
Worked example
Shree Lakshmi Hardware buys a laptop for ₹1,20,000 and puts it to use on 15 Oct 2026.
- Days used in FY 2026-27: 15 Oct 2026 to 31 Mar 2027 = 168 days.
- Books (SLM): (₹1,20,000 − 5% residual ₹6,000) ÷ 3 = ₹38,000 a year; first year 38,000 × 168 ÷ 365 = ₹17,490.
- Income tax: 40% rate, but under 180 days, so 20%: ₹1,20,000 × 20% = ₹24,000. Next year 40% of ₹96,000 = ₹38,400.
Notes and edge cases
- Blocks, not single assets: income tax works on the whole block; this tool treats your asset as the only one in its block.
- Which block: office equipment and two-wheelers are shown under general plant and machinery; that is our reading, and your CA may classify differently.
- Intangibles (patents, trademarks, licences) are at 25% for income tax; in the books they follow the accounting standards, not Schedule II.
- Extra shifts raise book depreciation for some assets under Schedule II; not modelled.
- MyRecords Assets keeps the asset register with book depreciation schedules, transfers, repairs, sale and scrapping. Its Income-tax depreciation page works out each block at its WDV rate, with the 180-day half rate, apart from your company books.