Guide · For Indian businesses
Write off 40% of a GPU server in year one.
Short answer: servers depreciate at 40% a year on the written-down value. On a ₹1 crore server, that’s ₹40 lakh in year one and ₹78.4 lakh over three years, deducted from your taxable profit.
- depreciation a year, written-down value
- 40%
- year-one write-off on a ₹1 crore server
- ₹40 lakh
- of the cost written off in three years
- 78%
- Income-tax Act, 2025, from April 2026
- §34
The schedule on a ₹1 crore server
Servers fall in the computers block, depreciated at 40% of the written-down value each year. Multiply each year’s depreciation by your tax rate to see the tax it saves. Renting gives a deduction too, but only as you pay; owning brings it forward.
| Year | Depreciation | Cumulative | Value left |
|---|---|---|---|
| Year 1 | ₹40 lakh | ₹40 lakh | ₹60 lakh |
| Year 2 | ₹24 lakh | ₹64 lakh | ₹36 lakh |
| Year 3 | ₹14.4 lakh | ₹78.4 lakh | ₹21.6 lakh |
| Year 4 | ₹8.6 lakh | ₹87 lakh | ₹13 lakh |
| Year 5 | ₹5.2 lakh | ₹92.2 lakh | ₹7.8 lakh |
₹1 crore server put to use for 180 days or more in year one. Installed later in the year, year one is 20%.
Questions
What is the depreciation rate for servers in India?
40% a year on the written-down value. From 1 April 2026 this sits under section 34 of the Income-tax Act, 2025, in the computers and software block.
What if the server is installed late in the year?
If it is put to use for less than 180 days in the year, you claim half the rate, 20%, in that first year.
Does renting GPUs give the same benefit?
No. Rent is deducted as an expense when you pay it. Owning lets you write off 40% of the server in year one, so the deduction comes earlier.
