Profit Margin Calculator
Calculate gross profit, margin and markup from cost and selling price.
Calculate MarginDepreciation Calculator
Calculate Asset Depreciation using Straight Line (SLM) & Written Down Value (WDV) methods.
Asset Details
Original purchase price of the asset.
Estimated resale value at the end of its useful life.
Expected number of years the asset will be used.
SLM deducts the same amount every year. WDV deducts a percentage, meaning higher deductions early on.
Depreciation Schedule
SLM Method
Annual Depreciation
₹ 9,000
Final Book Value
₹ 10,000
| Year | Opening Value (₹) | Depreciation (₹) | Closing Value (₹) |
|---|
SLM vs WDV — Understanding Depreciation Methods
Straight Line Method (SLM)
Equal depreciation charged every year. Best for assets with uniform economic usefulness (furniture, buildings).
Annual Dep. = (Cost − Salvage) ÷ Useful Life
Example: ₹1,00,000 asset, ₹10,000 salvage, 10 years
Annual Dep. = (1,00,000 − 10,000) ÷ 10 = ₹9,000/year
Annual Dep. = (1,00,000 − 10,000) ÷ 10 = ₹9,000/year
Written Down Value (WDV)
Higher depreciation in early years on reducing balance. Mandatory for Income Tax in India. Best for tech, vehicles.
Annual Dep. = Book Value × Rate %
Example: ₹1,00,000 asset at 15% WDV
Year 1: ₹15,000 | Year 2: ₹12,750 | Year 3: ₹10,838
Year 1: ₹15,000 | Year 2: ₹12,750 | Year 3: ₹10,838
| Feature | SLM | WDV |
|---|---|---|
| Annual depreciation | Equal every year | Higher early, lower later |
| Mandatory for Income Tax? | ✗ No | ✓ Yes (Sec 32) |
| Allowed under Companies Act? | ✓ Yes | ✓ Yes |
| Reaches zero book value? | ✓ Yes (by end of life) | ✗ No (theoretically never) |
| Best suited for | Buildings, furniture | Computers, vehicles, machinery |
Income Tax Act Depreciation Rates — Block-wise
WDV depreciation rates as prescribed under Section 32 of the Income Tax Act, 1961. All businesses and professionals must use these rates for tax computation.
| Asset Block | Description | WDV Rate |
|---|---|---|
| Building — Block 1 | Residential buildings (used for business) | 5% |
| Building — Block 2 | Commercial/office buildings, hotels | 10% |
| Building — Block 3 | Temporary structures | 40% |
| Furniture & Fittings | Office furniture, partitions, electrical fittings | 10% |
| Plant & Machinery — Block 1 | General plant and machinery | 15% |
| Plant & Machinery — Block 2 | Motor cars, scooters (not commercial use) | 15% |
| Plant & Machinery — Block 3 | Commercial vehicles (buses, trucks, taxis) | 30% |
| Computers & IT | Computers, laptops, printers, servers, software | 40% |
| Intangible Assets | Patents, copyrights, trademarks, know-how | 25% |
| New Mfg. Plant (Additional) | New machinery for manufacturing — additional depreciation claim | +20% (additional) |
Assets added in the second half of the year (after October 3rd) are eligible for only 50% of the normal depreciation in the year of purchase.
Companies Act (Schedule II) vs Income Tax Act
| Aspect | Companies Act 2013 | Income Tax Act 1961 |
|---|---|---|
| Method | SLM or WDV | WDV only (Sec 32) |
| Purpose | Financial reporting (P&L) | Tax deduction calculation |
| Asset life | Schedule II useful life | Block-wise WDV rates |
| Computer rate | SLM 33.33% (3 yr life) | WDV 40% |
| Vehicle rate | SLM 25.89% (8 yr life) | WDV 15–30% |
| Result | Two different P&Ls | Leads to deferred tax asset/liability |
Key Point: The difference between depreciation as per Companies Act (books) and Income Tax Act (tax returns) creates a Deferred Tax Asset or Liability that must be reported under AS-22 / Ind AS 12.
Key Depreciation Rules to Know
Half-Year Rule
Assets purchased after October 3rd (i.e., after the first half of the financial year) are eligible for only 50% of the normal WDV rate in the year of purchase under the Income Tax Act.
Block of Assets
Under the Income Tax Act, similar assets are grouped into 'blocks'. Depreciation is calculated on the total WDV of the block, not each asset individually. Additions and disposals adjust the block value.
Additional Depreciation (Sec 32(1)(iia))
New plant & machinery used for manufacturing or power generation qualifies for an additional 20% depreciation in the year of purchase (10% if installed in the second half).
Depreciation = Lower of Cost or Market
You cannot depreciate an asset below its residual/scrap value. Under Companies Act, if book value goes below scrap value, depreciation stops. Under IT Act, WDV theoretically never reaches zero.
Frequently Asked Questions
Two-scenario comparison
Compare the result before deciding
Save the current result as A, change the inputs, then save the new result as B. Nothing is uploaded.
Scenario A
No result saved yet.
Scenario B
No result saved yet.
Transparent calculation
Business formula and assumptions
MethodSLM = (cost − residual value) ÷ useful life; WDV = opening value × selected rate
- Enter values from the same accounting period.
- Review the formula and calculated result.
- Compare scenarios and validate decisions against complete financial records.
Important assumption: The output is a planning estimate and does not replace complete accounts, valuation or professional advice.
Private by design, useful as an estimate
Most calculation and document entries are processed in this browser. HSN search terms are sent to BharatERP only to return matching references. This shared tool layer does not send entered values to analytics.
Avoid entering passwords, bank credentials or unnecessary identity data. Outputs are estimates or editable templates—not legal, tax, investment, lending or accounting advice.
Depreciation Calculator result BharatERP PRO
Recommended next step
Continue with connected business records
Use this estimate for planning, then manage actual billing, accounting, inventory and reports in one business workflow. Available features depend on the selected paid plan.
Explore BharatERP PRO Schedule a Demo