Written down value

To compute an asset’s depreciable amount for income-tax reporting, start with the asset’s total capitalized cost—this includes the purchase price as well as installation and any other expenses needed to bring the asset into use. From this figure, deduct the depreciation already claimed in prior years. The resulting balance is the asset’s written-down value (WDV), which forms the basis for calculating depreciation for the present tax period.

Example:
Suppose machinery is acquired for ₹10,00,000 and installation adds another ₹50,000, bringing the recorded cost to ₹10,50,000. If past depreciation totals ₹4,00,000, then the WDV at the start of the year would be ₹6,50,000, and this amount would be used to compute the depreciation deduction for the year.