Income-Tax Depreciation: A FY 2025–26 Block Example

Fix the tax year and type of calculation

This example concerns the Indian Income-tax Act, 1961 framework for FY 2025–26 / AY 2026–27 and the notified return's depreciation schedules. It is not a timeless rule for every later tax year. A tax-depreciation computation is also different from the site's personal Income Tax Calculator, which estimates slab tax from an income amount. That tool does not identify an asset block, apply depreciation rates or prepare a business depreciation schedule. The ordinary Depreciation Calculator likewise offers accounting-style straight-line and double-declining illustrations rather than the complete statutory block computation.

Gather the block inputs before multiplying

For a stated block example, identify opening written-down value, qualifying additions, applicable prescribed rate, dates assets were put to use and relevant sale or realization amounts. Do not choose a rate merely because another asset has a similar purchase price. Classification and eligibility must be established from the applicable rules. Keep additions used for at least 180 days separate from additions used for less than 180 days where the half-rate rule applies. Purchase date alone does not establish the duration for which an asset was put to use.

Work through a limited numerical scenario

Assume a qualifying block with a verified rate of 15%, opening written-down value of ₹10,00,000, a qualifying addition of ₹2,00,000 eligible for the full rate and another qualifying addition of ₹1,00,000 subject to half of that rate. Assume no disposals, additional depreciation, private-use disallowance or other adjustments. The full-rate base is ₹12,00,000, producing ₹1,80,000. The half-rate addition gives ₹1,00,000×7.5%=₹7,500. Total depreciation in this deliberately limited scenario is ₹1,87,500. The 15% rate is an established input assumption, not a classification of an unspecified asset.

Reconcile the closing value under those assumptions

Opening value plus both additions is ₹13,00,000. Subtract the example's ₹1,87,500 depreciation to obtain closing written-down value of ₹11,12,500. This reconciliation works for the stated no-disposal scenario. It is not a universal closing-value formula for every block event. If realization amounts, adjustments or other provisions apply, the statutory computation and consequences need to be considered explicitly. Use the Scientific Calculator for the separate multiplication, addition and subtraction checks, while keeping the asset schedule that explains where every base amount came from.

Distinguish half a rate from monthly proration

In the limited example, an addition subject to half of a 15% prescribed rate receives 7.5% of its qualifying base. That is not the same calculation as multiplying 15% by the number of months owned divided by twelve. The notified schedule separates additions according to the relevant 180-day categories. Do not substitute a monthly accounting convention simply because it seems more precise. Also keep ordinary depreciation and any separately eligible additional depreciation distinct; this example does not determine eligibility for an additional allowance or model its carry-forward treatment.

Keep book depreciation and tax depreciation separate

An accounting register might allocate the cost of an individual asset over an estimated useful life with a residual value. A tax schedule can use prescribed categories and written-down values instead. Their annual amounts can legitimately differ. For example, a supplied five-year straight-line life is not a reason to replace a verified 15% block rate with 20%. Record both computations separately if both are needed. The difference may affect a broader tax reconciliation, but this article does not calculate the business's complete taxable income or any resulting accounting tax balances.

Verify the actual filing inputs and limitations

Use the applicable year's official schedules and supporting asset records to verify classification, cost basis, put-to-use dates, disposals and restrictions. Cases involving sale of all assets in a block, realization exceeding relevant values, mixed business use or special allowances require more than the simple scenario above. Preserve the statutory-year label with the result and review the rules before applying the example to another period. The arithmetic is reproducible once eligibility and rates are established; neither a general calculator nor this illustrative block table establishes a final allowable deduction for an individual filing.

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