Educational Institution

Sunil Kumar Nagpal (CA Final M.Com UGC (NET))   (95 Points)

11 July 2010  

Ist Query:-
For exemption from income tax educational institutions have to spent 85% of income ,
pls clarify that for calculating the 85% amount whether depreciation will be included or excluded.

Ist Reply by:

B.Chackrapani Warrier
( Expert )
23 June 2010


Depreciation can be included. The reason is the word used therein is "applied" and not "spent". The Andhra Pradesh High court in CIT Vs. Trustees of H.E.H The Nizam's Charitable Trust (1981) 131 ITR 497 had decided that the word 'applied' cannot be equated with 'spent'.

2nd Query:-

It means the both the Capital Expenditure & Depreciation will be allowed for calculating the 85% amount. It will be the double deduction ?????...

Reply : ??????