Question 1

What is the 180-day rule for depreciation?

Accepted Answer

If an asset is used for more than 180 days in a financial year, you can claim full year depreciation. If used for less than 180 days (typically purchased after September 30), you can only claim 50% of the annual depreciation rate in the first year.

Question 2

What is the depreciation rate for computers and laptops?

Accepted Answer

Computers and laptops have a depreciation rate of 40% per annum under the Written Down Value (WDV) method. This is one of the highest depreciation rates, allowing content creators and freelancers to write off computer equipment quickly.

Question 3

Should I buy equipment before or after September 30?

Accepted Answer

Buying before September 30 is tax-optimal as you get full year depreciation. For a Rs. 1.5 lakh laptop at 40% depreciation rate, buying in September saves Rs. 9,360 more in taxes (at 30% slab) compared to buying in October.

Question 4

What is the WDV method of depreciation?

Accepted Answer

Written Down Value (WDV) method calculates depreciation on the reducing balance of the asset each year. For example, a Rs. 1 lakh computer at 40% WDV: Year 1 depreciation is Rs. 40,000, Year 2 is Rs. 24,000 (40% of Rs. 60,000), and so on.

Question 5

Can I claim depreciation under Section 44ADA presumptive scheme?

Accepted Answer

No, under Section 44ADA presumptive taxation, you declare 50% of gross receipts as profit and cannot claim separate depreciation. However, if you opt out of presumptive taxation and maintain books of accounts, you can claim actual depreciation on equipment.

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