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Depreciation calculator with SLM, WDV and Schedule II useful lives
Enter what the asset cost, what it will be worth at the end and how many years it will last. Pick straight line or written down value and read the schedule year by year.
In short
This free depreciation calculator from SimpleERP builds a year-by-year schedule by straight line (SLM) or written down value (WDV), and lists Companies Act Schedule II useful lives. It shows yearly figures; SimpleERP's asset register posts the same methods as monthly, pro-rated schedules.
How to use it
Four inputs give you the whole schedule, from the first year to the last.
Enter the cost
What the asset cost to buy and put to use, before GST if you claim input tax credit on it.
Enter the salvage value and useful life
Schedule II assumes a residual value of up to 5% of cost. Take the life from the table below unless you have a technical reason to differ.
Pick SLM or WDV
For WDV, enter a rate or leave it blank to derive it from cost, salvage and life.
Read the schedule
Opening value, depreciation and closing value for each year. The asset never goes below its salvage value.
SLM or WDV: which should a small business use?
Both are allowed under the Companies Act. SLM charges the same amount every year and is simple to explain. WDV charges more in the early years, which suits assets that lose value fast, such as vehicles and computers. Whichever you choose, apply it consistently and write it in your accounting policy.
- SLM suits buildings, furniture and machines that wear evenly.
- WDV suits vehicles, computers and anything that dates quickly.
- Income tax depreciation is separate. The Income Tax Act uses WDV on blocks of assets at its own rates, so your books and your tax return will show different figures.
- Changing the method later is a change in accounting estimate; talk to your CA first.
Illustration of a fixed asset card with a monthly straight-line depreciation schedule.
Where do the useful lives come from?
Schedule II of the Companies Act 2013 sets the useful life of common asset classes, as notified; check the current rules. A company can use a different life only if it is justified technically and disclosed. The lives assume single-shift working; assets used in double or triple shifts depreciate faster.
- The SLM and WDV rates in the table are derived, from the life and a 5% residual value, not quoted from the Act.
- Proprietors and partnerships are not bound by Schedule II, but most use it as a fair guide.
- Low-value assets are often written off in the year of purchase under the business's own policy.
Do this automatically in SimpleERP
SimpleERP keeps a fixed asset register and posts depreciation to the books every month in one click, by straight line over months or declining balance at an annual rate.
- Categories set the default life, such as 120 months for furniture, changeable per asset.
- The first month is pro-rated by days in service.
- Assets stop at salvage value and show as fully depreciated.
- Sell or scrap an asset and the gain or loss books itself.
Illustration of a fixed asset card with a monthly straight-line depreciation schedule.
The maths
How it is calculated
Straight line spreads the depreciable amount evenly; written down value takes a fixed percent of what is left each year.
- SLM per year = (cost − salvage value) ÷ useful life in years. The last year takes any rounding, so the asset closes exactly at salvage.
- WDV per year = opening value × WDV rate ÷ 100. Next year's opening value is this year's closing value.
- WDV rate from life = (1 − (salvage ÷ cost)^(1 ÷ life)) × 100.
- Schedule II rates in the table: SLM = 95% ÷ life; WDV = (1 − 0.05^(1 ÷ life)) × 100, both assuming a 5% residual value.
Example
Worked example
Lakshmi Steel Furnitures in Coimbatore buys a welding set for ₹1,00,000.
| Year | Opening | Depreciation | Closing |
|---|---|---|---|
| 1 | ₹1,00,000.00 | ₹30,000.00 | ₹70,000.00 |
| 2 | ₹70,000.00 | ₹30,000.00 | ₹40,000.00 |
| 3 | ₹40,000.00 | ₹30,000.00 | ₹10,000.00 |
| Year | Opening | Depreciation | Closing |
|---|---|---|---|
| 1 | ₹1,00,000.00 | ₹40,000.00 | ₹60,000.00 |
| 2 | ₹60,000.00 | ₹24,000.00 | ₹36,000.00 |
Reference
Useful lives under Schedule II of the Companies Act
| Asset class | Useful life (years) | SLM rate | WDV rate |
|---|---|---|---|
| Factory buildings | 30 | 3.17% | 9.50% |
| Buildings other than factory buildings, RCC frame | 60 | 1.58% | 4.87% |
| Temporary structures | 3 | 31.67% | 63.16% |
| Fences, wells and tube wells | 5 | 19.00% | 45.07% |
| Plant and machinery, general | 15 | 6.33% | 18.10% |
| Continuous process plant | 25 | 3.80% | 11.29% |
| Concreting, crushing and piling equipment | 12 | 7.92% | 22.09% |
| Earth-moving equipment | 9 | 10.56% | 28.31% |
| Hydraulic works, pipelines and sluices | 15 | 6.33% | 18.10% |
| Electrical installations and equipment | 10 | 9.50% | 25.89% |
| Laboratory equipment, general | 10 | 9.50% | 25.89% |
| Furniture and fittings, general | 10 | 9.50% | 25.89% |
| Office equipment | 5 | 19.00% | 45.07% |
| Computers and laptops (end-user devices) | 3 | 31.67% | 63.16% |
| Servers and networks | 6 | 15.83% | 39.30% |
| Motor cars, not used for hire | 8 | 11.88% | 31.23% |
| Motorcycles and scooters | 10 | 9.50% | 25.89% |
| Lorries, buses and taxis used for hire | 6 | 15.83% | 39.30% |
Source: Companies Act 2013, Schedule II. Verified on .
Honest limits
What this calculator does not do
- It does not apply Income Tax Act block rates unless you enter the rate yourself as a WDV rate.
- It works in whole years; it does not pro-rate the first year by days or apply the half-rate rule for assets used under 180 days.
- Extra-shift depreciation is not added; raise the rate yourself for double or triple shifts.
FAQ
Questions, answered
What is the depreciation rate for furniture under the Companies Act?
Schedule II gives general furniture and fittings a useful life of 10 years. With a 5% residual value that works out to 9.50% a year by SLM or about 25.89% by WDV. As notified; check the current rules.
What is the depreciation rate for computers as per the Companies Act?
End-user devices such as desktops and laptops have a 3-year life, which is 31.67% by SLM or about 63.16% by WDV with a 5% residual. Servers and networks have 6 years.
Is depreciation under the Companies Act the same as under income tax?
No. The Companies Act sets useful lives for the books; the Income Tax Act sets WDV rates for blocks of assets, such as 10% for furniture and 40% for computers. Your books and your return will show different depreciation. As notified; check the current rules.
How do I calculate WDV depreciation?
Multiply the opening book value by the rate. At 40% on ₹1,00,000 the first year is ₹40,000, leaving ₹60,000; the second year is 40% of ₹60,000, which is ₹24,000.
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