Television Depreciation Rate: Practical Guide for Business Success

A television used for business purposes is generally treated as plant and machinery or office equipment, which determines the depreciation rate a business can claim under the Income Tax Act (ITA), 1961, and how the asset is reported under the Companies Act, 2013. 

Correct classification directly affects tax deductions, asset values and compliance, especially where businesses use televisions, display screens or CCTV systems across offices, retail outlets, clinics and commercial premises.

What is the television depreciation rate under the Income Tax Act, 1961

Under Section 32 of the ITA, 1961, depreciation is calculated using the written-down value (WDV) method for a block of assets. The Income Tax Rules prescribe the applicable rates for each block.

A television is not specifically listed in the depreciation schedule, so it generally falls under the residual plant and machinery category, which covers assets not separately specified elsewhere.

Applicable rate: 15% per annum on WDV.

If a business buys a television for ₹1,00,000 for business use, the cost is added to the plant and machinery block carrying the 15% rate. Depreciation is then calculated on the block as a whole, not on the television separately.

Two conditions must be met for the deduction:

• Ownership: The asset must be wholly or partly owned by the business. A television under a finance lease without ownership transfer generally remains with the lessor for depreciation purposes.
• Business use: The television must be used for business or professional purposes. A television kept in the owner’s residence, even if occasionally used for business news, generally does not qualify.

A key rule is the 180-day condition. If the television is first used for fewer than 180 days during the financial year, only 50% of the normal depreciation can be claimed in that year. For a television eligible for 15% depreciation, the allowable deduction becomes 7.5%. The remaining value continues within the block and depreciates in future years at the applicable rate.

What is the TV depreciation rate under the Companies Act, 2013

Under the Companies Act, 2013, depreciation is based on an asset’s useful life rather than a fixed percentage rate. Schedule II prescribes useful lives for asset classes, and businesses then calculate depreciation using either the straight-line method (SLM) or the WDV method.

Since Schedule II does not specifically classify televisions, businesses generally treat them as office equipment for depreciation purposes.

Under Schedule II, office equipment carries a recommended useful life of five years. A company may adopt a different useful life if it has a technical justification and discloses the variation in its financial statements.

Because the two laws can produce different depreciation figures, companies covered by the Companies Act usually maintain two separate depreciation schedules: one for financial reporting and one for tax computation. This difference creates a timing difference that is generally recognised as deferred tax in the books.

What classification and depreciation rate apply to CCTV systems?

The ITA does not specifically address CCTV systems, so the applicable depreciation rate depends on the asset's classification.

Plant and machinery: 15%

In most cases, CCTV systems are treated as general plant and machinery and attract depreciation at 15% under the WDV method. This is the conservative, commonly accepted approach, especially when the system primarily consists of standalone surveillance hardware.

Computer system: Higher depreciation in limited cases

A higher depreciation rate for computers may be arguable only in limited situations where the CCTV infrastructure functions as an integrated computer-based surveillance system that involves substantial software, networking, storage and data-processing functions.

The mere use of DVR or NVR equipment does not automatically make a CCTV system eligible for computer depreciation rates. Tax authorities may closely scrutinise such claims, so businesses should maintain technical documentation to support the classification adopted.

How to calculate television depreciation: A step-by-step example

A television used for business is added to the relevant plant and machinery block, and depreciation is calculated on the block’s WDV, not on the television separately.

A business buys a television for ₹80,000 on 1 June. Since it is used for more than 180 days during the financial year, the full depreciation rate applies.

• Opening WDV of the block: Suppose the opening WDV of the plant and machinery block on 1 April is ₹5,00,000.
• Add the cost of the new asset: ₹5,00,000 + ₹80,000 = ₹5,80,000.
• Apply the depreciation rate: 15% × ₹5,80,000 = ₹87,000.
• Closing WDV of the block: ₹5,80,000 − ₹87,000 = ₹4,93,000.

If the television is bought on 1 December and used for fewer than 180 days during the financial year, only half the normal depreciation applies to that asset in the first year.

What common errors do businesses make with asset depreciation?

Depreciation on electronic assets such as televisions and CCTV systems is often straightforward, but classification and timing errors can affect both deductions and compliance.

• Incorrect block classification: If a television is treated as furniture and fittings instead of plant and machinery, the applicable depreciation rate may be wrongly reduced. Equally, classifying it as a computer without a clear technical basis can create tax risk.
• Missing the 180-day rule: If the asset is purchased later in the financial year and used for fewer than 180 days, only 50% of the normal annual depreciation can be claimed in that year.
• Forgetting depreciation: Since the assessment year 2002-03, depreciation is generally treated as allowed even if it is not actually claimed, which can reduce future tax benefits.
• Mixing personal and business use: Depreciation applies only to the business-use portion of the asset, so the business use should be properly documented.
• Not maintaining a block register: Without tracking additions, disposals and the block's written-down value, it becomes difficult to support depreciation claims during audits.

Conclusion

Correct television and CCTV depreciation starts with one practical rule: classify the asset properly before you apply the rate. Once classification, business use and the 180-day rule are handled correctly, depreciation becomes far more accurate for both tax claims and financial reporting.

The real challenge is maintaining that accuracy year after year as assets are added, sold or reclassified within the block. TallyPrime helps businesses manage this with clearer asset tracking, correct block-wise depreciation and books that stay aligned with tax computation over time.