Rate of depreciation for software

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 March 2013 Dear Sir

What is rate depreciation for computer software purchased ?

if software purchased along with computer, what is rate of depreciation to be apply for computer and software are same rate can be apply or we have to separate it in the books?

Also clarify rate of depreciation for SLM and WDV

Ajay Mishra

Ajay Mishra (Expert)
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13 March 2013 Hi

Go to the following link, it will help you:

https://sites.google.com/site/amdandcompany/depreciation

Querist : Anonymous

Querist : Anonymous (Querist)

13 March 2013 Dear Sir

I have gone through that link, in this there is no category software in the companies act, so we have to take it for rate of depreciation same as software as well as computer right sir?

In case i am wrong mean correct me.

thanks
Rengasamy

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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19 July 2025 1. Rate of Depreciation for Computer Software
As per Income Tax Rules and Companies Act (around 2013), computer software is treated as an intangible asset.
The depreciation rate for computer software is 40% per annum under the Written Down Value (WDV) method.
This rate applies whether software is purchased standalone or along with hardware.
2. Depreciation on Computer and Software Purchased Together
Computer (hardware) is a tangible asset and depreciated at 15% (WDV) or 16.21% (SLM) depending on the method chosen.
Software is an intangible asset and is depreciated separately at 40% (WDV).
You should maintain separate records for computer hardware and software in the books.
Do not combine computer and software costs as a single asset for depreciation.
3. WDV vs SLM Method
Method Description Applicability
WDV (Written Down Value) Depreciation calculated on the reducing balance of asset value Most common for computers and software (as per Income Tax rules)
SLM (Straight Line Method) Depreciation charged evenly over asset’s useful life Allowed under Companies Act, but less common for computers
For computers and software, WDV method at the prescribed rates is typically followed.

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