I need to know this answer to prepare for filing my ITR3 in India.

While softwares in general are depreciated at 25%, as an intangible asset, how should a software with expiry of 3 yrs be depreciated?

  1. Can linear method be used where every year one third of the asset is depreciated, or
  2. Should I depreciate by 25% the first two years and in the year of expiry depreciate the balance?, or
  3. Should I depreciate by 25% every year, even after the software's expiry?
  • Your CA should be able to advise you. This is more of small business question than personal finance.
    – Dheer
    Commented May 9, 2020 at 4:42
  • Hi @Dheer, I generally prepare my P&L and balance sheet myself and go to the CA only when I need an audit, and I need this info for accounting of the depreciation.
    – kbsbng
    Commented May 9, 2020 at 9:54
  • You can treat this as expenses or use options 1 or 2, there is nothing right or wrong, it just has to be consistent.
    – Dheer
    Commented May 9, 2020 at 11:49


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