one of our client which is trusts. They are not charging depreciation on assets as per rates given in sec 32 of income tax act. Are they not bound by the income tax act. they are charging depreciation rates by themself at the rate given by the statutory auditors. we are their internal auditors
pls help
Hi , there is no need to charge the depreciation as per the income tax act , as there method of accounting may be different and they may charge at whatever rates as they want , but if they are required to file the return then they need to be in accordance with income tax act and they will claim exemption under section 11 and 12 .Charitable trust are entitled for depreciation as per CIT v. Raipur Pallottine Society [1989] 80 CTR (MP) 127.
Shyam Joshi & Associates
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