# Block of Asset — WDV Computation and Depreciation
## (1) What is a 'Block of Asset'?
A block of asset is a group of assets satisfying BOTH:
1. Same class of asset (Building, Furniture, P&M, or Intangible), AND
2. Same rate of depreciation.
For example, all 'Commercial Buildings' (10%) form one block. All 'Computers' (40%) form a separate block from 'Other Plant & Machinery' (15%).
Depreciation is computed on the WDV of the block, not on individual assets.
## (2) Standard Format for WDV & Depreciation
| Particulars | ₹ |
|---|---|
| Opening WDV of block as on 1st day of PY | XX |
| Add: Actual cost of asset(s) purchased during PY | XX |
| Less: Money received on sale / destruction / demolition / discard of asset(s) during PY | (XX) |
| WDV of Block for Depreciation | XX |
| Less: Depreciation | (XX) |
| Closing WDV (1st day of next PY) | XX |
## (3) Computing Depreciation — Three Sub-Buckets
The WDV available for depreciation must be split into three buckets, each treated differently:
```
WDV of Block for Depreciation
┌──────────────────┼───────────────────────┐
↓ ↓ ↓
Cost of asset Cost of asset Balance WDV
purchased but purchased & put (Opening WDV +
NOT put to to use for LESS prior assets put
use during PY than 180 days to use ≥ 180 days)
(i.e., on/after 4th
October)
↓ ↓ ↓
NO Depreciation HALF the prescribed FULL rate of depreciation
rate
```
### Three Rules to Remember
1. Asset purchased but not put to use during PY → No depreciation in current year.
2. Asset put to use for less than 180 days (i.e., put to use ON OR AFTER 4th October of a non-leap-year PY) → Depreciation at HALF the prescribed rate on its cost.
3. Balance WDV (opening WDV + assets put to use ≥ 180 days during PY) → Full rate of depreciation.
## (4) Half-Rate Restriction — Important Caveat
The half-rate rule applies ONLY when both purchase AND put-to-use occur in the SAME previous year.
If the asset was purchased in an earlier year and put to use in a later year, full rate depreciation applies in the year of put-to-use — irrespective of how many days it was used.
### Illustration of the Caveat
| Year of Purchase | Date of Put-to-Use | Treatment in PY 2025-26 |
|---|---|---|
| PY 2025-26 | 10.12.2025 (in same year) | Half rate (used < 180 days, purchase & PTU in same year) |
| PY 2024-25 | 10.12.2025 (next year PTU) | Full rate (purchase and PTU in different years) |
## (5) Treatment of Sale Consideration
When an asset is sold during the year, only the sale consideration / scrap value is deducted from the block — NOT the WDV of the individual asset. The block continues. No capital gain unless:
- The entire block becomes nil, OR
- Sale consideration exceeds WDV of the block (then short-term capital gain).