Depreciation Calculator – Straight Line and Written Down Value
For WDV, leave the rate empty and the tool uses the rate that brings the asset down to its salvage value. Tax depreciation in India follows block rates set under the Income Tax Act, so check the current rate for your asset class.
What is depreciation?
Depreciation spreads the cost of an asset, such as a machine, vehicle or computer, over the years it is useful, instead of treating the whole cost as an expense on the day you buy it. It shows up in your accounts as a yearly cost and lowers the asset's book value over time. The two common methods are straight line (SLM) and written down value (WDV).
Formulas
Straight line: yearly depreciation = (cost − salvage value) ÷ useful life, the same amount every year.
Written down value: yearly depreciation = opening book value × rate. Because the base shrinks, the charge is highest in the first year and falls each year. Depreciation never takes the book value below the salvage value.
Worked example
An asset costs ₹10,00,000, has a salvage value of ₹1,00,000 and a useful life of 5 years.
Straight line: (10,00,000 − 1,00,000) ÷ 5 = ₹1,80,000 every year, leaving ₹1,00,000 at the end.
WDV at 25%: year 1 is ₹2,50,000, year 2 is ₹1,87,500, year 3 is ₹1,40,625, year 4 is ₹1,05,468.75 and year 5 is ₹79,101.56, leaving a book value of about ₹2,37,305.
Frequently asked questions
Which method should I use?
SLM is simple and common in company accounts. WDV front-loads the charge, which suits assets that lose value fastest early on. Tax rules may require a particular method, so check before you choose.
What rate does the Income Tax Act use?
Tax depreciation in India uses the WDV method on blocks of assets, with rates that depend on the asset class and can change. Look up the current rate for your block and enter it as the WDV rate.
What if I leave the WDV rate empty?
Then the tool works out the rate that brings the asset exactly to its salvage value at the end of its life, which needs a salvage value above zero.
What is salvage value?
The amount you expect to get for the asset at the end of its useful life, by selling it or scrapping it. It can be zero.
Does this handle a part year?
No. It treats every year as a full year. If you bought the asset mid-year, accountants usually charge a proportion in the first year, so adjust by hand.
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Break-even Calculator · NPV & IRR Calculator · ROI Calculator · Compound Interest Calculator
Results are estimates for information only and are not financial, tax or legal advice.