Machinery Capex Payback & Depreciation Tax Shield Calculator
What is the real payback period on my plant and machinery capex factoring Section 32 WDV depreciation tax savings?
Financial Inputs
Capitalized freight, civil foundation, electrical paneling, and commissioning outlays.
Corporate tax rate under Section 115BAA.
Standard Income Tax Act rate for Plant & Machinery (15% WDV).
Payback Period
M
Total Capitalized Capex
2,25,00,000
Year 1 Depreciation Tax Shield
8,49,488
Key Financial Takeaways
- Machinery capex of ₹2,25,00,000 breaks even in 3 years. Section 32 depreciation (15% WDV) contributes ₹8,49,488 in Year 1 tax savings, delivering 5-year cumulative cash generation of ₹3,68,23,936.
Frequently Asked Questions
How does Section 32 depreciation tax shield reduce machinery payback time?
Depreciation is a non-cash expense. By claiming 15% WDV depreciation, your taxable profit is reduced, directly lowering the corporate income tax paid in cash. This tax shield cash retention accelerates the real payback of the machinery by several months.
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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