Fixed asset register for Indian companies: Schedule II and income-tax depreciation side by side
How to keep one fixed asset register that gives both Companies Act Schedule II book depreciation and the income-tax block of assets, with worked examples.
Last checked 6 min read
Most Indian companies keep two sets of depreciation numbers and one messy spreadsheet. The accountant works out book depreciation in one file, the tax consultant works out the block of assets in another, and nobody is sure the laptop in both is the same laptop. A well-built fixed asset register fixes that: one list of assets, two depreciation views, and figures that agree with what is actually on the floor.
This guide covers the columns you need, how Schedule II and the income-tax block method differ, and two worked examples you can check by hand.
What a fixed asset register needs to hold
Your auditor, your tax consultant and your IT or admin team all want different things from the same list. Build the asset register columns around all three:
| Group | Columns |
|---|---|
| Identity | Asset code, description, make and model, serial number, QR or tag number |
| Where it is | Location, department, current holder |
| Purchase | Vendor, invoice number and date, PO number, cost including non-refundable taxes |
| Books | Put-to-use date, Schedule II class, useful life, residual value, method (straight line or written down value) |
| Tax | Income-tax block and rate |
| End of life | Date of sale or scrapping, amount received |
Two columns cause most of the trouble. Put-to-use date is not the invoice date: a CNC machine that arrived in Chakan in February but was commissioned in May starts depreciating in May. Cost should include freight, installation and any GST you cannot take credit for, and leave out GST you do take credit for.
Schedule II useful life: the book view
Schedule II of the Companies Act, 2013 sets useful lives by class of asset. A company may use a different life, but then it must disclose it and the technical reason. The residual value is normally not more than 5% of the original cost.
The common classes for an office or plant:
| Class | Schedule II useful life |
|---|---|
| Laptops, desktops and other end-user computers | 3 years |
| Servers and networks | 6 years |
| Office equipment | 5 years |
| Furniture and fittings (general) | 10 years |
| Electrical installations | 10 years |
| Plant and machinery (general, not continuous process) | 15 years |
| Motor cars | 8 years |
| Factory buildings | 30 years |
Depreciation in the year of purchase or sale is worked out for the days the asset was in use. Software and licences are intangible assets and are amortised over their own useful life, not under the Schedule II table. Companies that are not covered by the Companies Act, such as LLPs, partnerships and proprietors, follow the accounting standard on property, plant and equipment, and many simply use the income-tax rates in their books. Your CA decides which policy fits.
Block of assets depreciation: the tax view
Income tax does not look at each asset's life. It groups assets into blocks and applies a written-down value (WDV) rate to the whole block. The commonly used rates:
| Block | Rate on WDV |
|---|---|
| Computers including software | 40% |
| Plant and machinery (general) | 15% |
| Motor cars (not used in a hiring business) | 15% |
| Furniture and fittings | 10% |
| Buildings (general) | 10% |
Three rules make the tax view behave differently from the books:
- Half rate in the first year if the asset was used for less than 180 days in the year of purchase.
- No residual value. The block keeps reducing year after year.
- Sales reduce the block, not a single asset. If the money received is more than the block's value, the excess is taxed as a capital gain, and if a block is emptied the leftover may become a loss.
The Income-tax Act, 2025 applies from tax year 2026-27 and keeps the block-of-assets approach. Rates are notified in the rules and do change, so confirm the current table with your tax consultant before closing the year.
A worked example: one laptop, two numbers
A Bengaluru office buys a laptop for ₹90,000 and puts it to use on 10 October 2026. The financial year ends on 31 March 2027, so the laptop is in use for 173 days.
Books, Schedule II, straight line:
- Residual value: 5% of ₹90,000 = ₹4,500
- Amount to depreciate: ₹85,500 over 3 years = ₹28,500 a year
- This year: ₹28,500 × 173 / 365 = ₹13,508
- Closing book value: ₹76,492
Income tax, computers block at 40%:
- Used under 180 days, so half the rate: 20%
- This year: ₹90,000 × 20% = ₹18,000
- Closing tax WDV (for this addition): ₹72,000
The book and tax depreciation difference here is ₹4,492. It reverses over the following years, which is why it is a timing difference. Your accountant records deferred tax on it under the applicable accounting standard (AS 22 or Ind AS 12).
A second example: furniture for a Pune plant office
Furniture worth ₹2,00,000 goes into use on 1 May 2026, which gives 335 days in the year.
| Books (Schedule II, 10 years, straight line) | Tax (furniture block, 10%) | |
|---|---|---|
| Base | ₹1,90,000 after 5% residual | ₹2,00,000 |
| Depreciation this year | ₹19,000 × 335 / 365 = ₹17,438 | ₹20,000 (used 180 days or more) |
| Closing value | ₹1,82,562 | ₹1,80,000 |
Here tax depreciation is higher than book depreciation in year one and lower later on, because the tax rate is applied on a falling WDV while the books run straight line.
Keep the register and the floor in step
A register is only as good as its last count. Clause 3(i)(a) of CARO 2020 asks whether proper records with full particulars, quantitative details and location are kept, and clause 3(i)(b) asks whether the assets were physically verified at reasonable intervals. If you have not run a count this year, our guide to asset physical verification under CARO 2020 covers the method.
A few habits keep the register honest:
- Tag every item worth tracking with a QR sticker carrying the asset code. Low-value items such as mice and cables are better tracked by count as stock, and usually expensed.
- Record every move. A laptop handed from Priya in Finance to Arjun in Sales should change the holder column the same day.
- Close disposals properly. Record the date, method and amount received, so the books show a gain or loss and the tax block is reduced.
- Reconcile to the trial balance every quarter: the register's total cost and accumulated depreciation by class should match the ledgers.
Common mistakes we see
- Starting depreciation from the invoice date instead of the put-to-use date.
- Capitalising GST that was claimed as input credit.
- Using the 40% tax rate in the books of a company that must follow Schedule II.
- Forgetting the 180-day rule for additions in the second half of the year.
- Leaving scrapped assets on the register for years because nobody filled in the disposal.
One register, two views
You do not need two spreadsheets. Keep one record per asset with both the Schedule II class and the tax block, and let the system produce both schedules for the year. The Asset Manager does this from the same register it uses for handovers and counts, with Schedule II as the default book method and a separate income-tax block view, each exportable for your CA. Whatever tool you use, have your auditor confirm the useful lives and residual value policy once, in writing, and then apply it the same way every year.