Depreciation Calculator – Track Asset Value Over Time
All-in-One Depreciation Calculator
Choose Your Method: Straight-Line, DB, or DDB
Depreciation Calculator Tool
Depreciation Calculator – Track Asset Value Over Time
The Depreciation Calculator helps you determine how much value an asset — like machinery, a vehicle, or office equipment — loses each year over its useful life. This is essential for business accounting, tax filing, and understanding the true current worth of your assets.
How to Use the Depreciation Calculator
- Enter the Asset Cost — the original purchase price.
- Enter the Salvage Value — the expected resale or scrap value at the end of its useful life.
- Enter the Useful Life in years.
- Select the Depreciation Method (Straight-Line is most common; Declining Balance is also available for accelerated depreciation).
- Click Calculate to see the yearly depreciation amount and a year-by-year value schedule.
Formula Used
Straight-Line Method:
Annual Depreciation = (Asset Cost − Salvage Value) ÷ Useful Life
Declining Balance Method:
Annual Depreciation = Book Value at Start of Year × Depreciation Rate (%)
Worked Example
Suppose a business purchases machinery for ₹5,00,000, with an expected salvage value of ₹50,000 after 10 years of useful life.
Using the Straight-Line Method:
Annual Depreciation = (5,00,000 − 50,000) ÷ 10 = ₹45,000 per year
This means the machinery's book value reduces by ₹45,000 every year, reaching ₹50,000 (the salvage value) at the end of year 10.
Practical Context: Depreciation for Indian Businesses
Depreciation is a key concept for Indian small business owners and freelancers filing income tax returns, since the Income Tax Act allows depreciation to be claimed as a business expense, reducing taxable income. Indian tax rules typically use the Written Down Value (declining balance) method with rates specified for different asset blocks — for example, 15% for plant & machinery in many cases. This calculator gives you a general estimate; always confirm exact rates with a chartered accountant when filing taxes.
Frequently Asked Questions
Q1. Which depreciation method does the Indian Income Tax Department require?
The Income Tax Act generally mandates the Written Down Value (declining balance) method for tax purposes, with rates specified per asset block.
Q2. What is salvage value?
It's the estimated residual worth of an asset at the end of its useful life — for example, the scrap value of old machinery.
Q3. Can I use this for calculating car depreciation?
Yes, though vehicles often depreciate faster in the first few years, so a declining balance method may give more realistic results than straight-line.
Q4. Why does declining balance depreciation reduce over time?
Because each year's depreciation is calculated on the reduced book value from the previous year, not the original cost, so the deduction amount shrinks annually.