The depreciation rate as per income tax act depends on the block an asset falls in: 40% for computers, laptops and software, 15% for cars, general plant and machinery, 10% for furniture and fittings, and 5% or 10% for buildings. Rates are applied on the written down value of the whole block, not asset by asset.
Only assets used for business or profession qualify. A salaried person cannot claim depreciation on a personal phone or car. The rates below are from the Appendix to the Income-tax Rules, 1962, which apply to FY 2025-26 income; for income tax rather than company accounts, the useful life tables of the Companies Act do not matter.
Quick facts
Method
Written down value on blocks of assetsComputers and software
40%Motor car
15% (30% if run on hire)Furniture
10%Buildings
5% residential, 10% othersUsed under 180 days
Half the rate in the first yearAdditional depreciation
20% on new plant and machinery for manufacturers
Depreciation rate as per income tax act: the rate chart
| Asset | Block | Rate |
|---|---|---|
| Residential building (other than hotels and boarding houses) | Building | 5% |
| Office, shop, factory or other non residential building | Building | 10% |
| Temporary wooden structures | Building | 40% |
| Furniture and fittings, including electrical fittings | Furniture | 10% |
| General plant and machinery, office equipment, CCTV | Plant and machinery | 15% |
| Motor car, including an electric car, not used for hire | Plant and machinery | 15% |
| Buses, lorries and taxis used in a hiring business | Plant and machinery | 30% |
| Computers, laptops and computer software | Plant and machinery | 40% |
| Know how, patents, copyrights, trademarks, licences, franchises | Intangible assets | 25% |
Goodwill is not a depreciable asset for FY 2020-21 onward, even when it was bought.
Vehicle depreciation rate as per income tax
A car used in your business or profession sits in the 15% block, whether it runs on petrol, diesel or battery. An electric vehicle does not get a separate rate. The 30% rate is only for vehicles used in a business of running them on hire, such as a taxi operator or a transporter's lorries. Two wheelers for staff and delivery vans used in your own trade are also at 15%.
If a car is used partly for personal trips, the tax officer can disallow a share of the depreciation. Keep a simple log of business use.
Depreciation on computer, laptop, mobile and printer
- Computers and laptops: depreciation on computer as per income tax act is 40%, and depreciation on laptop as per income tax follows the same 40% rate, including desktop sets and servers.
- Computer software: 40%, whether bought outright or as a licence with long term use.
- Printers and scanners: depreciation on printer as per income tax act is not listed separately. Printers and scanners used with a computer are commonly treated as computer peripherals at 40%, a view tribunals have accepted in several cases. Stand alone office machines go at 15%.
- Mobile phones: for depreciation on mobile as per income tax there is no separate entry, so they go in general plant and machinery at 15%.
- CCTV cameras and office equipment such as air conditioners: 15%.
Worked example with the half rate rule
A consultant's purchases in FY 2025-26.
- Car bought 1 May for ₹10,00,000, used over 180 days: 15% = ₹1,50,000. Closing WDV ₹8,50,000.
- Laptop bought 10 October for ₹90,000. It is used for 173 days, less than 180, so half of 40% applies: 20% = ₹18,000. Closing WDV ₹72,000.
- Office chairs and table bought 1 June for ₹60,000: 10% = ₹6,000. Closing WDV ₹54,000.
- Total depreciation for the year: ₹1,74,000.
In FY 2026-27 the laptop block gets the full 40% on ₹72,000, which is ₹28,800.
The half rate affects only the year of purchase. The other half is not lost; it is simply spread over later years through the WDV.
How the block of assets works
All assets with the same rate form one block. Selling a block asset at a profit can create a gain, explained on the capital gains page. Purchases during the year are added to the block, and sale proceeds are deducted. Depreciation is then charged on the balance. Two results follow.
- If sale money is more than the block's value, the excess is a short term capital gain, even if the asset was held for years.
- If the last asset of a block is sold and the money is less than the block value, the shortfall is a short term capital loss.
Payments for an asset in cash above ₹10,000 in a day to one person are not counted in its cost, so no depreciation is allowed on that part.
Additional depreciation in income tax
A business that makes or produces goods, or generates or distributes power, can claim an extra 20% in the first year on new plant and machinery. Office machines, vehicles for road transport, second hand machines and machinery installed in an office or residence do not qualify. The half rate rule also applies, and the unclaimed half is allowed in the next year.
Individuals and HUFs taxed under the new regime of section 115BAC, and companies under the concessional rate of section 115BAA (see company tax rates), cannot claim additional depreciation. Small businesses on presumptive income under 44AD do not claim depreciation separately, because it is treated as already allowed. The same applies to professionals using 44ADA.
Depreciation from tax year 2026-27
For assets used from 1 April 2026, depreciation is allowed under the Income-tax Act, 2025, with the rate table in the Income-tax Rules, 2026. The block and WDV approach continues. Opening WDV on 1 April 2026 is the closing WDV of FY 2025-26, so carry your block figures forward exactly. Check the rate for any unusual asset in the new rules before the first return under the new Act.
Common depreciation errors
| Mistake | What to do |
|---|---|
| Using Companies Act useful life rates in the tax return | Use the income tax block rates; keep both sets of books |
| Full rate on an asset bought in January | Use half the rate if it was used less than 180 days in the year |
| Claiming depreciation on a personal phone while salaried | Not allowed; depreciation is for business or professional assets |
| Treating a mobile phone as a computer at 40% | A phone goes in the 15% block |
The rates here are a general summary. Asset classification can be argued either way in some cases, so for your books take a chartered accountant's view and read the current rules on the income tax department's website.
Sources we checked
- Income-tax Act, 1961, section 32
- Income-tax Rules, 1962, Appendix I
- Income-tax Act, 1961, section 43(1)
- Income-tax Act, 2025 and Income-tax Rules, 2026
Frequently asked questions
What is the depreciation rate on a car as per income tax?
15% on the written down value for a car used in business or profession. A vehicle used in a business of running it on hire gets 30%.
What is the laptop depreciation rate in income tax?
Laptops and computers are depreciated at 40%. If bought and used for less than 180 days in the year, only 20% is allowed in that first year.
What is the mobile phone depreciation rate in income tax?
Mobile phones fall in general plant and machinery at 15%.
What is the furniture depreciation rate in income tax?
Furniture and fittings, including electrical fittings, are at 10%.
What is the depreciation on building as per income tax act?
Residential buildings are at 5% and other buildings such as offices, shops and factories at 10%. Temporary wooden structures get 40%.
What is the printer depreciation rate in income tax?
A printer used with a computer is usually treated as a computer peripheral at 40%. Some officers argue for 15%, so keep the purchase bill showing it was bought for computer use.
Is there a depreciation rate chart pdf on the official site?
The complete table sits in the Appendix to the Income-tax Rules, published on the department's rules and Acts site. This page lists the rates most people need.