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1.A building is taken on lease by a company and a sum of Rs.100000 paid initially.
2.Depreciation not allowable under income tax act so how we can claim expenses of Rs.100000, whether by writing off of leased assets over the term of lease.(say 5 years)
2.Depreciation not allowable under income tax act so how we can claim expenses of Rs.100000, whether by writing off of leased assets over the term of lease.(say 5 years)
THE QUESTION PUT BY YOU IS NOT CLEAR. THE PAYMENT OF RS.1.00 LACS IS ON WHAT ACCOUNT. SUPPOSE A DEPOSIT OF RS.1.00 AS SECURITY IS GIVEN, IT IS REIMBURSABEL AT THE END OF THE LEASE PERIOD ON GIVING THE POSSESSION OF THE BUILDING TO THE LAND LORD. IT IS NECESSARY TO ASCERTAIN THE NATURE OF THE PAYMENT. SUPPOSE IT IS LEASE RENT FOR 5 YEARS, PAID IN ADVANCE, THEN EVERY YEAR 1/5TH OF THE AMOUNT CAN BE CHARGED TO PROFIT AND LOSS ACCOUNT AND THE BALANCE HAS TO BE SHOWN AS PREPAID EXPENSES. THESE EXPENSES WILL BE AN ALLOWABLE EXPENSE UNDER THE INCOME TAX ACT, 1961. THERE IS NO RULE OF THUMB ALL DEPENDS ON THE NATURE OF THE PAYMENT.
DEEPAK THUKRAL
CHANDIGARH
DEEPAK THUKRAL
CHANDIGARH
Hi, You should show it as Expenses paid in advance that forms part of current assets. rgds vishwanath
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Listed Under profit and loss direct expenses profit and loss account income tax act City-India-Gurgaon Country-India
Personal-Budget -Income-and-Exp enses-for-Full- Calendar-Year.x ls
