I’m looking for some guidance on accounting for our assets. What is the standard depreciation rate we should be using for electronics like printers, projectors, cameras, hard disks, and GPS units?
We are a Non-Governmental Organization (NGO) based in India, and these electronics are primarily used for our field operations. We need to properly account for them for our annual financial reporting and tax filings.
Does the depreciation rate for NGOs differ from the standard rates for for-profit companies? If you have any experience with this, or could point me to the relevant sections of the Income Tax Act for NGOs, I would be very grateful.
For all the electronics you listed (printers, projectors, cameras, hard disks, GPS units), the standard depreciation rate is 40% per year.
Here are the key points:
Same Rate for All: The depreciation rate is set by the Income Tax Act and is the same for both NGOs and businesses.
It’s a Valid Expense: For your NGO, claiming depreciation counts as an expenditure. This helps you meet the requirement of spending 85% of your income on your mission.
Asset Category: All these items are classified as “Computers and computer software,” which is why they share the 40% rate.
Hi Pooja, thanks for sharing. Considering that the Act only says “computers, including computer software” could you share the precedent for why all these other items are added to this category. Hard disk seems straightfoward and I suppose printers and projectors need to be connected to a computer to work. But why cameras, GPS devices? We checked with a few organisations and most of what we use in the field - voice records, GPS, cameras seem to be categorised at 15% as part of the catch all category “Plant and machinery excluding those covered by sub-items (2), (3), and (8) below”. Would really help to understand if there is some clarificatory notice or something that has come out on these electronics. Thanks!
Hi Marianne, you’re absolutely right; the Act itself only mentions “computers, including computer software” at 40%. Over time, through interpretation and practice, items that are clearly computer accessories or peripherals (like hard disks, printers, projectors) have been clubbed under this 40% rate since their utility is directly tied to computers.
For others like cameras, GPS devices, and voice recorders, there is no specific mention under the “computers” block. As you noted, these typically fall under the general category of “Plant and Machinery (other than those covered by special rates)” and are depreciated at 15%.
There isn’t a separate explicit notification pulling cameras/GPS under the 40% category. They continue to remain at 15% unless directly integrated into a computer system.
Classification of Equipment as Professional Equipment:
Grouping items like computers, projectors, cameras under “Professional Equipment” is acceptable, especially when they serve a specific operational or programmatic purpose.
Applying computer depreciation rates to such equipment is common, especially when their usage and obsolescence patterns are similar to IT assets. However, consistency and disclosure in accounting policy are key.
Rates for NGOs are not different from for profits.The below will be helpful for Depreciation rates
Printers, projectors, Cameras and GPS units will not qualify as computers including computer software. Hard disks for storage will qualify under computer software as per note 7 of the table.
Hi Sharad,
Thanks for the clarification. How do you interpret the ruling in CIT vs. Cactus Imaging India Pvt. Ltd. by the Madras High Court, as well as ACIT vs. Container Corporation of India Ltd. (Delhi Bench), where it was held that output devices such as printers and scanners cannot function independently and are integral to the computer system? Even the Calcutta High Court, in multiple litigations, has allowed a higher rate of depreciation by recognizing that printers, scanners, and other peripherals form an essential part of the computer setup. Thanks