Depreciation Rates Table

Important Notes

• WDV Method Only: Under the Income Tax Act, depreciation is calculated only on the Written Down Value (WDV/reducing balance) method. SLM (Straight Line Method) is NOT applicable under Income Tax — it is a Companies Act concept.
• Exception — Power Generation: Undertakings engaged in generation or generation and distribution of power may compute depreciation on actual cost (SLM basis) under Section 33(2) of the Income Tax Act, 2025.
• Half-Year Rule: If an asset is acquired and put to use for less than 180 days during the previous year, only 50% of the normal depreciation is allowed for that year.
• Additional Depreciation (Section 33(4)): An additional depreciation of 20% of actual cost is available on new plant & machinery (excluding ships, aircraft, office equipment, second-hand assets, and assets installed in office premises) acquired and installed by an assessee engaged in the business of manufacture or production. If asset is used for less than 180 days, 50% of additional depreciation (i.e. 10%) is allowed in that year, and the balance 10% in the next year.
• Block of Assets: Under Income Tax, assets are grouped into blocks based on rates. Depreciation is computed on the WDV of the entire block, not on individual assets.
• 40% Cap under New Regime: For assessees opting for the new concessional tax regime (Sections 199/200/201), maximum depreciation is capped at 40% WDV under Section 33(3).
• CII Not Applicable: Cost Inflation Index (CII)-based adjustments do not apply to depreciable assets. Capital gains on depreciable assets are always short-term.
• Effective From: These rates are effective from Assessment Year 2026-27 under the Income Tax Act, 2025. The corresponding depreciation rules are prescribed under Rule 25.