⌖ Utility / Direct Tax
Depreciation Rates (Income Tax Act).
Block-wise depreciation under Section 32 read with Rule 5 (WDV method).
As of
Income Tax Rules, as amended; current for AY 2026-27
⌖ Context
Depreciation rates prescribed under Appendix I of the Income Tax Rules, 1962, applied on the Written Down Value (WDV) method under Section 32 read with Rule 5. Power-sector undertakings may opt for Straight Line Method under Appendix IA. Additional depreciation of 20% (one-time) is available on new plant & machinery acquired by a manufacturing concern under Section 32(1)(iia). Where an asset is put to use for less than 180 days in the year of acquisition, only 50% of the prescribed rate is allowed for that year.
⌖ Source
Appendix I, Income Tax Rules, 1962
Block I: Buildings
| Asset | WDV Rate |
|---|---|
| Residential buildings (other than hotels/boarding) | 5% |
| Buildings other than residential | 10% |
| Temporary erections (wooden structures) | 40% |
Block II: Furniture & Fittings
| Asset | WDV Rate |
|---|---|
| Furniture and fittings, including electrical fittings | 10% |
Block III: Plant & Machinery
| Asset | WDV Rate |
|---|---|
| General plant and machinery | 15% |
| Motor cars (not used in hire business) | 15% |
| Motor buses, lorries, taxis used in hire business | 30% |
| Aeroplanes | 40% |
| Computers including software | 40% |
| Books: annual publications / library | 40% / 100% |
| Energy saving devices, renewal energy devices | 40% |
| Air pollution control / water pollution control equipment | 40% |
| Plant used in solid waste control / waste management | 40% |
| Wooden parts of artificial silk manufacturing machinery | 40% |
| Cinematograph films: bulb of studio lights | 40% |
| Containers made of glass or plastic used as refills | 40% |
| Oil wells | 15% |
| Ships: fishing vessels | 20% |
| Ships: other than fishing vessels | 20% |
Block IV: Intangibles
| Asset | WDV Rate |
|---|---|
| Know-how, patents, copyrights, trademarks, licences, franchises, business or commercial rights | 25% |
Goodwill of a business or profession was removed from the block of intangible assets w.e.f. AY 2021-22. No depreciation is now allowable on goodwill.
Additional depreciation under Section 32(1)(iia)
20% (one-time, in addition to normal depreciation) on new plant & machinery acquired and installed by a manufacturing assessee. 10% if put to use for less than 180 days. The balance 10% is allowed in the immediately succeeding previous year.
Not allowed on: ships, aircraft, second-hand machinery, machinery installed in office/residential premises, road transport vehicles, and machinery on which 100% deduction is otherwise allowed.
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