The Income-tax Act, 2025 has applied since 1 April 2026, and it renumbered almost every section a finance team quotes. For laptops the substance has not changed: a bought Mac is depreciated at 40% a year on the written-down value, and rent for a Mac used in the business is deducted as it is paid. What did change is where the rules sit, and the TDS rule on rent is worth a second look.
Buying: depreciation at 40%
Section 33 of the new Act allows depreciation at the rates prescribed in the Income-tax Rules, 2026. Rule 25 applies Appendix I, where computers including computer software sit at 40% of the written-down value. Section 33(4) halves the rate in the tax year a computer is bought if it is used for less than 180 days that year. Both are in the Act and the Rules on the income-tax department's site.
One MacBook Air 13-inch M5 with 16GB and 512GB, bought at 7.5% below its ₹1,49,900 MRP, costs ₹1,17,506 before GST, which is recovered as input credit. Depreciated on its own, at a 25.17% tax rate:
| Tax year | Depreciation at 40% | Tax saved at 25.17% |
|---|---|---|
| Year 1, used 180 days or more | ₹47,002 | ₹11,831 |
| Year 2 | ₹28,201 | ₹7,098 |
| Year 3 | ₹16,921 | ₹4,259 |
In practice computers are depreciated as a block, so a sale at the end of the term reduces the block rather than appearing as a separate gain.
Renting: deducted as it is paid
Rent for equipment used in the business is deductible under the general deduction in Section 34(1) of the Income-tax Act, 2025, which allows expenditure laid out wholly and exclusively for the business and not of a capital nature. Section 28 covers rent for premises, not equipment; Section 34(1) is the successor to the old Section 37(1). That is our reading of the two sections; confirm it with your CA.
For the same MacBook Air at ₹6,746 a month plus GST, the rent is ₹80,952 a year. At a 25.17% tax rate, the deduction saves ₹20,376 a year.
TDS on rent: 2% above ₹50,000 a month
Section 393(1) of the new Act carries the old TDS on rent. For the use of machinery, plant or equipment, the rate is 2%, once the rent crosses ₹50,000 for a month or part of a month. Section 402(29) includes equipment in the meaning of rent.
- Who deducts: a specified person under Section 402(37): any payer that is not an individual or HUF, plus individuals and HUFs whose turnover in the previous year crossed ₹1 crore for a business or ₹50 lakh for a profession.
- What happens if you do not: Section 35(b)(i) disallows 30% of the rent until the tax is deducted and paid.
Ten MacBook Airs at ₹67,460 a month cross the threshold, so a company deducts 2%, ₹1,349 a month, and deposits it. Five at ₹33,730 a month do not.
The two routes side by side
| Buy | Rent | |
|---|---|---|
| What you deduct | Depreciation, 40% of written-down value | Rent, as it is paid |
| Section | Section 33 with Rule 25, Appendix I | Section 34(1) |
| Tax saved over three years, one MacBook Air | ₹23,188 | ₹61,128 |
| TDS to deduct | None | 2% if rent is above ₹50,000 a month |
| Pre-tax cost over three years | ₹1,17,506, less resale | ₹2,42,856 in rent |
Renting saves more tax only because it costs more: the deduction is worth a quarter of a larger number. After tax, and in today's money, buying this MacBook Air costs about ₹80,169 over three years and renting about ₹1,61,746. Our rent-or-buy calculator runs the same sums with your tax rate.
What to update after the switch to the new Act
- Section references in vendor contracts, TDS workings and board notes: 194-I is now Section 393(1), and the old depreciation provisions are now Section 33 with Rule 25.
- The TDS threshold on rent is monthly, at ₹50,000 for a month or part of a month.
- The year is a tax year; the old previous year and assessment year pair is gone.
We are a rental company, not tax advisers. Confirm the treatment for your books with your CA.
Send the fleet and we will put the monthly rent, the GST and the TDS position on one quote: rentals.adalwin.com/quote.
Questions
What is the depreciation rate for laptops under the Income-tax Act, 2025?
40% of the written-down value. Section 33 allows depreciation at prescribed rates, and Rule 25 of the Income-tax Rules, 2026 applies Appendix I, where computers including software are at 40%. It is halved in the year of purchase if the computer is used for less than 180 days.
Is laptop rent tax-deductible for a business in India?
Yes, in our reading under the general deduction in Section 34(1) of the Income-tax Act, 2025, as expenditure laid out wholly and exclusively for the business. Confirm with your CA.
Is TDS deducted on laptop rental payments?
Yes, at 2% under Section 393(1) of the Income-tax Act, 2025, when rent for equipment crosses ₹50,000 for a month or part of a month and the payer is a specified person, which includes companies.
Which section replaced 194-I under the new Income-tax Act?
Section 393(1), Table serial number 2(ii). The rate for machinery, plant or equipment is 2%, with a threshold of ₹50,000 for a month or part of a month.
12+ years in corporate procurement, gifting, and IT supply-chain in India. Leads an authorised Apple DPP Partner and Logitech Enterprise Partner serving 110+ enterprises. About Sameer K Singh →
