Use this free online depreciation calculator to work out how much value an asset loses each year using either the Straight-Line or Declining Balance (double declining) method. Enter the asset cost, salvage value, and useful life to get an annual breakdown and a year-by-year depreciation schedule.
How to Use the Depreciation Calculator
Enter the original purchase price in the "Asset Cost" field.
Enter the estimated resale value at the end of its useful life in "Salvage Value".
Enter the number of years the asset will be used in "Useful Life (years)".
Choose "Straight-Line" for equal yearly depreciation, or "Declining Balance" for an accelerated method.
Click "Calculate Depreciation" to view the annual/total depreciation and the year-by-year schedule.
The Two Methods in Detail
Straight-Line: the depreciable amount (cost − salvage value) is divided equally over the useful life. Each year's charge is the same, and the book value falls in a straight line to the salvage value in the final year.
Declining Balance: the calculator uses the double-declining rate of 2 ÷ useful life. For a 5-year life that is 40% a year, charged on the book value at the start of each year. If a year's charge would take the book value below salvage, it is reduced so the book value stops exactly at salvage.
Worked Example: ₹5 Lakh Machine, 5-Year Life
A machine costs ₹5,00,000 and is expected to sell for ₹50,000 after 5 years. Straight-Line gives (5,00,000 − 50,000) ÷ 5 = ₹90,000 every year. Declining Balance at 40% gives:
Year
Straight-Line charge / book value
Declining Balance charge / book value
1
₹90,000 / ₹4,10,000
₹2,00,000 / ₹3,00,000
2
₹90,000 / ₹3,20,000
₹1,20,000 / ₹1,80,000
3
₹90,000 / ₹2,30,000
₹72,000 / ₹1,08,000
4
₹90,000 / ₹1,40,000
₹43,200 / ₹64,800
5
₹90,000 / ₹50,000
₹14,800 / ₹50,000
Both methods write off the same ₹4,50,000 in total. Declining Balance simply front-loads it: 40% of the cost in the first year against 18% under Straight-Line. In year 5 the declining-balance charge is capped at ₹14,800 so that the book value lands on ₹50,000.
When the salvage value is small relative to cost and the life is long, the declining-balance schedule can finish above the salvage value. For example, ₹1,00,000 with ₹5,000 salvage over 10 years ends at about ₹10,737. "Total Depreciation" in the result box is always cost minus salvage, so in such cases it will be higher than the sum of the schedule. Accountants usually handle this by switching to straight-line for the later years.
Which Method Fits Which Purpose
Straight-Line suits assets that give roughly equal service every year, such as buildings, furniture and office fit-outs, and is simple to explain and audit.
Declining Balance suits assets that lose value or usefulness quickly at first, such as vehicles, computers and phones. It is also a better guide to what a used vehicle or laptop might fetch in resale.
Company accounts in India follow the Companies Act, 2013, whose Schedule II indicates useful lives for different classes of asset; a company can use either method but must apply it consistently.
Income tax works differently. Assets are grouped into blocks and depreciated on the written-down value at rates fixed by the tax rules, for example 15% for general plant and machinery and 40% for computers, with only half the rate allowed if an asset is used for less than 180 days in the year of purchase. Salvage value and useful life do not enter that calculation, so use this tool for book or planning figures, and confirm current tax rates with the Income Tax Department or a chartered accountant.
Frequently Asked Questions
Straight-Line depreciation spreads the asset's loss in value evenly across its useful life using the formula (Asset Cost − Salvage Value) ÷ Useful Life. Declining Balance uses the double declining rate (2 ÷ Useful Life) applied to the asset's remaining book value each year, so depreciation is higher in the early years and tapers off over time.
An asset can only depreciate down to its salvage value, so the cost must exceed the salvage value for there to be any depreciation to calculate. If the values entered don't meet this condition (or if useful life isn't a whole number greater than zero), the calculator shows a validation message instead of a result.
No. Under the Declining Balance method the calculator caps each year's depreciation so the book value never falls below the salvage value you entered, and under Straight-Line the final year is set exactly to the salvage value.
Use what you realistically expect to get when you dispose of the asset: resale prices of similar used items, scrap value, or a trade-in quote. For company accounts, Schedule II of the Companies Act generally expects the residual value not to exceed 5% of the original cost unless the company can justify a higher figure. If you expect nothing back, enter 0.
Not directly. Tax depreciation in India uses fixed written-down-value rates on blocks of assets, not a useful life or salvage value. You can approximate one asset's tax depreciation for a single year by multiplying its opening written-down value by the applicable rate, but the official rate table and block rules should be checked for your return.