Depreciation Rates FY 2025-26 – Income Tax Act
Introduction Depreciation is a critical concept in taxation and accounting. Under Section 32 of the Income Tax Act, 1961, depreciation allows taxpayers to claim a deduction for the gradual wear and tear of tangible and intangible assets used in business or profession. It ensures that the cost of assets is spread across their useful life, aligning tax deductions with economic reality.For FY 2025-26, depreciation continues to be calculated either on the Written Down Value (WDV) method or the Straight Line Method (SLM). The Income Tax Act prescribes specific rates for different blocks of assets, ensuring uniformity and fairness in tax computation Depreciation Rates (WDV Method) The WDV method is the default method applicable to most businesses. Assets are grouped into blocks, and depreciation is applied to the block as a whole rather than individual assets. Below is the detailed chart: Sr No Particulars of Asset Rate of Depreciation 1 Buildings used mainly for residential purposes (except hotels & boarding houses) 5% 2 Buildings other than residential (including offices, factories, godowns, hotels) 10% 3 Purely temporary erections such as wooden structures 40% 4 Furniture & fittings including electrical fittings 10% 5 Plant & machinery (general) 15% 6 Motor cars (not used for hire) 15% 7 Motor cars, other than those used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020. 30% 8 Motor buses, lorries, taxis used for hire 30% 9 Motor buses, motor lorries and motor taxis used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020. 45% 10 Aeroplanes, aero engines 40% 11 Ships 20% 12 Computers including software 40% 13 Life saving medical equipment 40% 14 Energy saving devices 40% 15 Books (annual publications) 100% 16 Books (other than annual publications) 60% 17 Gas cylinders, containers 40% 18 Rolling mills, steel plant machinery 40% 19 Intangible assets (goodwill, patents, trademarks, licenses, franchises, know-how) 25% Notes (WDV Method) • Depreciation is calculated on the block of assets, not individual items. • If an asset is acquired and put to use for less than 180 days in the year, only 50% of the rate is allowed. • Additional depreciation of 20% is available for new plant and machinery acquired by manufacturing undertakings. • Certain specialized assets (like books, gas cylinders, rolling mills) enjoy higher rates due to faster wear and tear. ________________________________________ Depreciation Rates (SLM Method) The Straight Line Method is applicable primarily to undertakings engaged in generation or distribution of power. Instead of fixed rates, assets are depreciated based on their useful life. distribution of power. Instead of fixed rates, assets are depreciated based on their useful life. Sr No Particulars of Asset Life of Asset (Years) 1 Buildings (RCC Frame Structure, other than factory buildings) 60 2 Buildings (other than RCC Frame Structure, including factory buildings) 30 3 Fences, wells, tube wells 5 4 Temporary structures, others 3 5 Bridges, culverts, bunders 30 6 Carpeted Roads – RCC 10 7 Carpeted Roads – other than RCC 5 8 Non-carpeted Roads 3 9 Plant & Machinery (general) 15 10 Continuous process plant (not covered under special industries) 25 11 Cinematograph film machinery & projecting equipment 13 12 Glass manufacturing – furnaces 13 13 Glass manufacturing – moulds 8 14 Float glass melting furnaces 10 15 Mines & quarries – portable machinery 8 16 Telecom towers 18 17 Telecom equipment (switching, transmission, etc.) 13 18 Telecom ducts, cables, optical fibre, satellites 18 19 Oil & gas – refineries, assets, petrochemical plant, storage tanks, drilling rigs 25 20 Oil & gas – pipelines 30 21 Oil & gas – field operations equipment, loggers 8 22 Power generation – Thermal, Hydro, Nuclear, Transmission lines 40 23 Wind Power Plant 22 24 Electric Distribution Plant 35 25 Gas Storage & Distribution Plant, Water Distribution Plant 30 26 Steel – Sinter Plant, Blast Furnace, Coke Ovens, Rolling Mill 20 27 Steel – Basic Oxygen Furnace Converter 25 28 Non-ferrous metals – major equipment (pot line, digester, turbine, calcination, copper smelter, roll grinder) 40 29 Non-ferrous metals – Soaking Pit, Annealing Furnace, Rolling Mills, Scalping/Slitting equipment 30 30 Non-ferrous metals – Surface Miner, Ripper Dozer, Copper refining plant 25 31 Medical diagnostic equipment (X-ray, ECG, Ultrasound, etc.) 13 32 Other medical equipment 15 33 Pharmaceuticals – reactors, distillation, drying, tanks 20 34 Civil construction – concreting, crushing, piling, road making 12 35 Civil construction – cranes >100 tons 20 36 Civil construction – cranes <100 tons 15 37 Civil construction – transmission line, tunneling equipment 10 38 Civil construction – earth-moving equipment 9 39 Civil construction – other construction equipment 12 40 Salt works machinery 15 41 Furniture & fittings (general) 10 42 Furniture in hotels, restaurants, schools, theatres, etc. 8 43 Motor cycles, scooters, mopeds 10 44 Motor buses, lorries, cars, taxis (used for hire) 6 45 Motor buses, lorries, cars (not used for hire), tractors, harvesters, heavy vehicles, electric vehicles 8 46 Ocean-going ships – bulk carriers, liners, passenger vessels, coastal ships 25–30 47 Crude/product/chemical tankers 20–25 48 Offshore supply/support vessels, catamarans, high-speed boats 20 49 Drill ships 25 50 Hovercrafts 15 51 Fishing vessels (wooden hull) 10 52 Dredgers, tugs, barges, survey launches 14 53 Inland water vessels – speed boats 13 54 Inland water vessels – others 28 55 Aircrafts & helicopters 20 56 Railways sidings, locomotives, rolling stock, tramways 15 57 Ropeway structures 15 58 Office equipment 5 59 Computers – servers & networks 6 60 Computers – desktops, laptops 3 61 Laboratory equipment (general) 10 62 Laboratory equipment (educational institutions) 5 63 Electrical installations & equipment 10 64 Hydraulic works, pipelines, sluices 15 Key Notes • Blocks with identical useful lives have been combined for clarity (e.g.,