Charge of depreciation

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neha

neha (Querist)

20 June 2014 Can Section 25 coompanies claim depreciation or not?

Guest

Guest (Expert)

20 June 2014 https://www.caalley.com/gn/gn_dep.html

yes they can claim dear

Nikhil Kaushik

Nikhil Kaushik (Expert)

20 June 2014 well it is a dicey one. reason being section 25 companies dont do business (forget companies act for a minute).

So where do they claim depreciation after claiming full deduction in year or purchase? well it has been decided in favor of assessee on several occasions. please refer https://fmsfindia.org.in/publication_upload/standard/s&n-ls-v4-i6.pdf

neha

neha (Querist)

20 June 2014 Is it mandatory to charge depreciation or is at the option of the Assessee ?

Nikhil Kaushik

Nikhil Kaushik (Expert)

20 June 2014 as far as Income-tax Act is concerned, you can avoid charging given that either:

1. the asset is purchased out of capital contributions and not routed through the profit & Loss A/c

or

2. bought out of general donations and deduction claimed at 100% in the first year itself.

nevertheless, the debate has always been on whether the charitable organization allowed to claim depreciation even if the 100% deduction has already been claimed. On this question it has been repeatedly held that you can do so.

neha

neha (Querist)

20 June 2014 Thank U very much sir !!!

Nikhil Kaushik

Nikhil Kaushik (Expert)

20 June 2014 you are welcome Neha.....

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