Income Tax · Section 32 · FY 2026-27
Depreciation Calculator
Block of Assets
Compute Written Down Value (WDV) depreciation block-wise under Section 32 of the Income-tax Act, with the half-year rule, additional depreciation for manufacturing and Section 50 capital gains on block extinction.
Key Depreciation Rates — FY 2026-27
Buildings
| Residential buildings | 5% |
| Commercial buildings / factories | 10% |
| Temporary structures / wooden | 100% |
Plant & Machinery
| General plant & machinery | 15% |
| Motor vehicles (not for hire) | 15% |
| Motor vehicles (for hire) | 30% |
| Computers / software | 40% |
| Solar energy equipment | 40% |
| Air pollution control equipment | 100% |
Furniture & Intangibles
| Furniture & fittings | 10% |
| Intangibles (patent, know-how, trademark) | 25% |
| Ships | 20% |
| Aeroplanes | 40% |
Additional depreciation u/s 32(1)(iia): 20% on new plant & machinery for manufacturing/power undertakings (10% if used < 180 days). Not available on office appliances, vehicles, retail trade assets.
Depreciation Schedule — FY 2026-27
Consolidated Summary — All Blocks
Verify actual depreciation rates applicable to your specific asset from the Income-tax Rules, 1962 (Appendix I). Rates above are standard; notified rates may vary for specific asset sub-types.
Frequently Asked Questions
What is the block of assets method for depreciation?
Under Section 32 of the Income-tax Act, assets of the same class and same rate are pooled into a single 'block'. Depreciation is applied on the Written Down Value (WDV) of the whole block, not on individual assets. This means the identity of individual assets merges into the block.
What is the half-year rule under Section 32?
An asset put to use for less than 180 days during the year of acquisition qualifies for only 50% of the applicable depreciation rate for that year. For example, a computer (40% rate) acquired in January and used for 3 months (< 180 days) attracts only 20% depreciation in the year of acquisition.
What is additional depreciation u/s 32(1)(iia)?
Manufacturing and power-generation undertakings can claim additional depreciation of 20% on the actual cost of new plant and machinery in the year of first use. If the asset is used for less than 180 days in the installation year, only 10% additional depreciation is allowed; the remaining 10% is carried forward to the next year. Additional depreciation is not available on office appliances, vehicles, or assets used in retail business.
What happens when sale proceeds exceed the block WDV?
If the total sale consideration of all assets sold from a block exceeds the opening WDV plus additions during the year, the block is extinguished (WDV becomes zero or negative). The excess is treated as short-term capital gain (STCG) under Section 50 — taxed at applicable slab rates or business income rates, not at special LTCG rates.
Is depreciation mandatory under income tax?
Yes. Unlike Companies Act depreciation, income-tax depreciation under Section 32 is mandatory for assets used in a business or profession. You cannot choose to skip it in a year to preserve WDV for future years. Unabsorbed depreciation, however, can be carried forward indefinitely (unlike other unabsorbed losses).
Can unabsorbed depreciation be carried forward?
Yes. Unabsorbed depreciation (where depreciation exceeds business income) can be carried forward indefinitely under Section 32(2). There is no 8-year limit as applicable to business losses. It can be set off against income from any head (not just business) in subsequent years.
Depreciation rates and rules are governed by Appendix I, Income-tax Rules 1962 and Finance Act amendments. This calculator is for estimation purposes. Verify rates for your specific asset sub-type and year of acquisition on incometax.gov.in. Last reviewed: June 2026.