Written Down Value (WDV)

Written down value refers to the depreciable value of an asset for income tax purposes. It represents the portion of the asset’s cost that remains after accounting for accumulated depreciation or wear and tear in previous years.

Key Features:

Calculation

WDV=Total Cost of Asset−Accumulated Depreciation/Wear and Tear

Total Cost of Asset includes purchase price, installation charges, and any related expenses necessary to bring the asset into use.

Accumulated Depreciation is the sum of all depreciation deductions claimed in prior tax years.

Purpose:

Determines the current tax value of an asset.

Used to calculate depreciation deductions for the current and future years.

Applicability:

Commonly used for buildings, machinery, equipment, vehicles, and other depreciable assets.

Example: Asset purchased for ₹1,00,000 Accumulated depreciation over 2 years: ₹20,000 Written down value: ₹1,00,000 − ₹20,000 = ₹80,000 Depreciation for the next year is calculated based on ₹80,000