Depreciation Schedule in Excel (Companies Act & IT Act)

Last updated: 27 June 2026

Indian businesses must maintain two parallel depreciation schedules — one under the IT Act (Written Down Value method, for tax computation) and one under the Companies Act Schedule II (for statutory accounts). A single Excel asset register handles both, with separate formula columns for each regime, so your deferred tax working emerges automatically.

Key takeaways

• India has two depreciation regimes: IT Act (WDV rates, block of assets) and Companies Act (Schedule II useful lives, SLM or WDV).
• The difference between the two charges creates a deferred tax liability or asset — you need both figures for your tax note.
• Under the IT Act, assets of the same class are pooled into a "block"; depreciation applies to the block WDV, not to individual assets.
• An asset put to use for less than 180 days in the year of acquisition attracts only half the normal IT Act rate for that year — for an April–March financial year, that means assets put to use on or after about 4 October.
• Under Companies Act, a company may choose SLM or WDV but must apply it consistently.
• One Excel register with clearly labelled columns is sufficient — no accounting software is required.

Why do Indian businesses need two depreciation figures?

Companies prepare statutory accounts under the Companies Act 2013 and compute taxable income under the Income Tax Act 1961. The two laws diverge on method and asset life:

Because the two charges rarely match, a deferred tax difference arises each year — building both into the same Excel sheet saves hours at year-end.

What rates and useful lives apply?

Common IT Act WDV rates (Appendix I, Income Tax Rules 1962):

Companies Act Schedule II useful lives:

Confirm the exact rate or life for an unusual asset class against the current Appendix I / Schedule II text before filing.

Fact box. Under the IT Act, depreciation is not tracked per individual asset. All assets of the same prescribed class are pooled into a "block." The WDV of the entire block is carried forward. When you sell an asset, its sale proceeds reduce the block WDV; if the block goes negative, a short-term capital gain arises.

Fact box. The difference between IT Act depreciation and Companies Act depreciation in the same year is a temporary difference. This creates a Deferred Tax Liability (when book depreciation is lower than tax depreciation) or a Deferred Tax Asset (when book depreciation is higher). Companies subject to tax audit must disclose this under Ind AS 12 / AS 22.

How do I build the Excel asset register?

Step 1 — Set up your columns

Create a sheet named Asset Register with these columns:

Step 2 — Enter the core formulas (from row 2 downward)

1. IT Act depreciation — full year (cell G2): =F2*E2

2. IT Act depreciation — half-year rule (replace G2 if needed). The test is whether the asset was put to use for fewer than 180 days in the financial year. Compute the days from the purchase date to the 31 March year-end and halve the rate if that is under 180: =IF((DATE(YEAR(C2)+IF(MONTH(C2)>=4,1,0),3,31)-C2)<180, F2*E2*0.5, F2*E2)

   This counts the days the asset is held to year-end, so an asset put to use on or after about 4 October (and any asset bought in January–March) correctly gets the half rate — unlike a simple month test.

3. Closing WDV (cell H2): =F2-G2

4. SLM depreciation — full year (cell J2): =D2/I2

5. SLM depreciation — pro-rated for mid-year additions (replace J2): =D2/I2*(12-MONTH(C2)+1)/12 (counts from purchase month to March; adjust if your year-end differs)

6. Net Book Value (cell K2): =D2-J2 (For subsequent years, subtract cumulative SLM depreciation.)

Step 3 — Add a summary block below the asset list

Multiply the deferred tax difference by your applicable tax rate to get the deferred tax movement for the year.

Step 4 — Handle disposals

Add a column L labelled Status. For disposed assets, enter "Disposed" and update the depreciation formula:

=IF(L2="Disposed",0,IF((DATE(YEAR(C2)+IF(MONTH(C2)>=4,1,0),3,31)-C2)<180,F2*E2*0.5,F2*E2))

Under the Companies Act, derecognise the asset and record profit or loss on disposal in the P&L. Under the IT Act, sale proceeds reduce the block WDV.

How Ankeshan helps

Ankeshan's Excel-based asset module calculates IT Act WDV and Companies Act SLM depreciation side by side, flags half-year-rule assets, and produces a ready-to-file schedule. Join the waitlist to be notified when it is available.

Frequently asked questions

Can I use SLM for income tax purposes? No. The IT Act mandates WDV under Section 32 for most asset classes; SLM is not permitted for taxable depreciation. Use SLM only for Companies Act accounts.

What does "block of assets" mean in practice? All assets of the same prescribed class are pooled into one block. New costs are added and sale proceeds deducted from the block WDV; depreciation is never computed per individual asset.

Can computers really be depreciated in about 3 years under Companies Act? Yes. Schedule II gives computers a 3-year useful life, making each year's SLM charge roughly one-third of cost (less a 5% residual). Under the IT Act the 40% WDV rate leaves a small but never-zero residual.

Do I need separate schedules for Companies Act and IT Act? Yes. Form 3CD requires the IT Act figure; statutory accounts require the Companies Act figure. The register here produces both in one sheet.

What residual value applies under Companies Act? Schedule II caps residual value at 5% of original cost for SLM. Adjust the formula: =(D2-(D2*5%))/I2.

What opening WDV do I use for existing assets? Use the previous year's closing WDV for IT Act purposes. For Companies Act SLM, divide original cost by total useful life and track accumulated depreciation separately.

Sources and disclaimer

• Income Tax Act 1961, Section 32; Appendix I to the Income Tax Rules 1962 — prescribed WDV rates.
• Companies Act 2013, Schedule II — useful lives for tangible assets.
• ICAI guidance notes on depreciation accounting.

Disclaimer: This article is for general information only and does not constitute tax or legal advice. The rates and useful lives quoted are the standard prescribed figures as of mid-2026; confirm any unusual asset class against the current official statutory text or consult a qualified chartered accountant before preparing accounts or filing a tax return.

Related links

• Accounting in Excel — overview
• Balance sheet format in Excel for Indian SMBs
• Profit and loss statement template in Excel
• Financial year-end closing checklist