The Statutory Brief

IT Act 1961 → 2025 / Section 32

Business income

Section 32 → Section 33

Depreciation on tangible and intangible business assets

Section 32 of the old Income-tax Act, 1961 · new section 33 under the Income-tax Act, 2025

New reference Section 33

Income-tax Act, 1961Section 32

  • Block-of-assets WDV method at prescribed rates (Appendix I)
  • Half rate if asset used for less than 180 days
  • Additional depreciation of 20% on new plant and machinery for manufacturers
  • Power undertakings: straight-line option

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 33

  • Same scheme, now section 33
  • WDV on blocks at prescribed rates (33(3))
  • 50% of the rate for assets used under 180 days (33(4))
  • Additional depreciation of 20% on new plant or machinery retained

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered; rates continue to be prescribed in the Rules. No goodwill depreciation, as before.

Practice notes

  • Check the rate table in the Income-tax Rules, 2026 rather than old Appendix I.
  • Depreciation is not available for assets on which full capital expenditure was deducted (e.g. section 46).

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

Which section covers depreciation in the new Income Tax Act 2025?

Section 33 of the Income-tax Act, 2025 (old section 32); rates are prescribed in the Income-tax Rules.

What is section 32 called in the new Income-tax Act, 2025?

Section 32 of the Income-tax Act, 1961 corresponds to Section 33 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 32 under the new Income Tax Act?

Renumbered; rates continue to be prescribed in the Rules. No goodwill depreciation, as before.

Is section 32 still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 32 of the 1961 Act. Section 33 of the 2025 Act applies from tax year 2026-27.

Related sections

35AD→46100% deduction of capital expenditure for specified businesses (warehousing, hotels, hospitals, pipelines, etc.)43B→37Deductions allowed only on actual payment (taxes, PF, bonus, leave encashment, MSME dues)44AB→63Tax audit of accounts for businesses and professions above turnover limits