Depreciation Calculator
Calculate straight-line depreciation for assets with annual schedule, book value and total depreciation.
Annual Depreciation
$4,500
Total Depreciation
$45,000
Book Value
$5,000
Yearly Schedule
| Year | Depreciation | Book Value |
|---|---|---|
| 1 | $4,500 | $45,500 |
| 2 | $4,500 | $41,000 |
| 3 | $4,500 | $36,500 |
| 4 | $4,500 | $32,000 |
| 5 | $4,500 | $27,500 |
| 6 | $4,500 | $23,000 |
| 7 | $4,500 | $18,500 |
| 8 | $4,500 | $14,000 |
| 9 | $4,500 | $9,500 |
| 10 | $4,500 | $5,000 |
Last updated: August 2026
How this calculator is verified
Checked by True Calculator automated test suite on
- Formula verified against a published worked example in the automated test suite
- Edge cases (zero, negative, boundary and unit-mismatch inputs) covered by unit tests
The full verification method is on our how we verify page. Found an error? Tell us and we will re-check it.
When to Use This Calculator
Depreciation matters most at tax time and when selling used assets. For a business, the Income Tax Act allows claiming depreciation on machinery, computers and vehicles under the straight-line method, and knowing the written-down value each year keeps books accurate. Individuals use the same math when pricing a used car, two-wheeler or phone for resale: the vehicle that cost ₹10 lakh five years ago is not worth that today, and this calculator shows the expected value at any age. It is also useful for insurance valuations and for deciding whether to repair an old device or replace it. Enter the purchase price, useful life and purchase year to get each year's value and total depreciation. For fleet owners with several vehicles, the same straight-line method keeps the entire fleet book value consistent for loans and insurance renewals. Shopkeepers and photographers also use straight-line depreciation to claim wear-and-tear on equipment bought for the business. Even small home-office setups qualify — the laptop and desk you bought for freelance work can be depreciated when filing business expenses. The tool is equally useful for two-wheelers and phones, where resale value falls fastest in the first year.
How to Use This Calculator
- Step 1: Enter the asset's original cost — the invoice price, including GST if it was capitalised.
- Step 2: Enter the salvage value — what the asset will be worth at the end of its useful life.
- Step 3: Enter the useful life in years.
- Step 4: Read the annual depreciation, the year-by-year schedule with book value and the accumulated depreciation.
Worked Example
A machine bought for ₹5,00,000 with a salvage value of ₹50,000 and a 5-year useful life depreciates by ₹90,000 a year under straight-line. The schedule shows the book value falling to ₹4,10,000 after year one and to ₹50,000 at the end of year five, with total depreciation of ₹4,50,000. Note that the Income-tax Act mostly uses declining-balance rates — 40% for computers and 15% for general plant and machinery — so the two figures can differ.
Tips and Common Mistakes
- •Tip 1: This tool uses straight-line depreciation; the Income-tax Act allows declining-balance (WDV) rates under Section 32 — 40% for computers and 15% for general plant and machinery and motor cars.
- •Tip 2: Depreciating an asset keeps its book value aligned with reality for resale and insurance planning.
- •Tip 3: For business vehicles, depreciation is claimed through the WDV block in the tax return; keep the straight-line figure separate for your books.
- ✗Mistake 1: Entering zero salvage for assets that will still have resale value — it overstates the annual depreciation.
- ✗Mistake 2: Confusing the useful life with the loan tenure or the warranty period of the asset.
Frequently Asked Questions
What is straight-line depreciation and how is it calculated?
It spreads an asset's cost evenly over its useful life: (purchase cost − salvage value) ÷ useful life in years. A machine bought for ₹5,00,000 with a ₹50,000 salvage value and 5-year life depreciates by ₹90,000 a year.
What depreciation rates does the Income Tax Act allow?
Under Section 32, most business assets use the declining-balance (WDV) method with rates like 40% for computers and software, 15% for general plant and machinery and motor cars, and 10% for furniture. This calculator uses straight-line, so tax and book figures can differ.
How does claiming depreciation affect my taxes?
Depreciation is an allowable business expense, so claiming it lowers your taxable business income under the head 'Profits and gains of business or profession'. You must actually own and use the asset for the business, and claim from the year it is put to use.
Can I depreciate a car used for both personal and business purposes?
Only the business portion is deductible — depreciation is restricted to the proportion of business use. A personal car bought for commuting cannot be depreciated at all in income tax, though knowing its depreciated value still helps when you sell it.
How is depreciation useful for selling a used asset?
The year-by-year book value is the natural starting point for pricing a used car, two-wheeler or phone for resale, since value falls fastest in the first year. It also keeps fleet books consistent for insurance valuations and loans, and helps you decide whether to repair an old device or replace it.
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