Block of Assets under Section 32: Income Tax Depreciation Explained
How the block-of-assets concept works under Section 32 of the Income-tax Act, why individual assets lose identity, and how additions, the 180-day rule and disposals move the WDV.
Income-tax depreciation works very differently from book depreciation. Under Section 32, you do not depreciate individual assets — you depreciate a block of assets: a group of assets of the same class carrying the same rate, all pooled into a single written-down value.
Why the block matters
Once an asset enters a block, it loses its individual identity for tax. Additions increase the block's WDV; moneys payable on assets sold or discarded reduce it. Depreciation is charged on the block's closing WDV at the prescribed rate — Plant & machinery, Buildings, Furniture & fittings, Ships and Intangibles each form their own blocks.
The 180-day rule
An asset put to use for less than 180 days in the year of acquisition gets only half the normal depreciation rate that year; the remaining benefit comes through the block in later years. AssetOS applies this using the actual days of use, splitting additions into full-rate and half-rate pools.
Section 50: when the block turns negative or empties
- If sale proceeds exceed the block's WDV and additions, the block goes negative — that surplus is a short-term capital gain under Section 50.
- If every asset in a block is sold but a WDV balance remains, the shortfall is a short-term capital loss.
AssetOS maintains the income-tax blocks alongside your book register: 180-day treatment, additional depreciation, and Section 50 gains and losses are computed automatically, and rates are effective-dated rather than hardcoded.