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Feb 08, 2024 Circulars & Notifications Attachment Link
Depreciation is a non-cash expenditure to protect an organization against erosion in the value of assets and is generally charged while the finalization of accounts to reflect a true and fair view of the financial result and the financial status of the organization.
Depreciation is available to charitable or religious organizations under section 11(1) read with section 11(6) of the Income-tax Act. Therefore, Charitable Organizations need to understand the difference between an asset created out of income (subject to application) and assets created from sources other than income.
In this issue, we have discussed the allow ability of depreciation while computing income subject to application and allow ability of depreciation as an application of income.