How Industrial Machinery Depreciation is Calculated in India (2025 Updates)

Calculating the depreciation of industrial machinery is crucial for tax planning and determining the resale value of assets like diesel generators, CNC machines, and transformers. In India, depreciation is primarily governed by the Income Tax Act, 1961 and the Companies Act, 2013.

1. WDV vs. SLM Methods

The Written Down Value (WDV) method is most common for industrial assets, allowing for higher depreciation in the initial years. The Straight Line Method (SLM) spreads the cost evenly over the asset's useful life. For most used generators in Coimbatore and Erode, the WDV method reflects the rapid decline in market value more accurately.

2. Current Depreciation Rates (2025)

As of 2025, general plant and machinery attract a depreciation rate of 15% under the Income Tax Act. However, specific energy-saving devices or specialized textile machinery may qualify for different rates. It is essential to categorize your equipment correctly to maximize tax benefits.

3. Impact of Runtime Hours on Resale Value

While tax depreciation follows fixed percentages, the actual market value of a used diesel generator depends heavily on runtime hours and maintenance history. A 62.5 kVA Kirloskar set with 2,000 hours will command a significantly higher price than one with 10,000 hours, regardless of its book value.

Disclaimer: This guide is for informational purposes. Consult with a qualified Chartered Accountant for precise tax calculations and compliance.