Can depreciation be claimed by charitable institution

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2015 Dear Sir,

As per provision of income tax act, the entire expenditure incurred for the acquisition of capital assets is treated as application of income for charitable purpose under section 11(1)(a). Hence, the assessee cann't claim depreciation while computing his income.
But if assessee does not take the benefits of 100% deduction of cost in acquisition year then Is he liable to claim depreciation in future years?

CA. SHIVA SHANKARA R. SHETTY

CA. SHIVA SHANKARA R. SHETTY (Expert)
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09 April 2015 In case of trust, which is for charitable purpose can avail dual benefits on capital asset. It can be claim, purchase of capital asset, as 'application of income' as well as claim 'depreciation' on the same asset.

As per the section 11, it eligible to claim as 'application of income'. However, depreciation u/s. 32 is mandatory in nature. AO cannot denay such benefit.

Therefor, trust can avail both the benefits.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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09 April 2015 Trust can claim depreciation as an application of income if cost of the underlying asset is not claimed as such. This is inferred as a corollary to section 11(6) came into effect from 1-4-2015 by the Finance (No.2) Act,2014.

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