Claiming of prepaid expenses
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 July 2013
Hi
One of our client owns wine shop he has paid license fee in the month of june2010 that is license fee is for full year from june2010 to next may2011. My query is whether we can claim full fee as expenditure for the year in which it is actually paid that is for the FY 2010-11 only. If yes please could you tell me under which section of incoem tax act.
Thanks in advance
One of our client owns wine shop he has paid license fee in the month of june2010 that is license fee is for full year from june2010 to next may2011. My query is whether we can claim full fee as expenditure for the year in which it is actually paid that is for the FY 2010-11 only. If yes please could you tell me under which section of incoem tax act.
Thanks in advance
CA Parul Saxena
(Expert)
10 July 2013
Fee is to be bifurcated into 2 portion:-
From June 2010 to march 2011-Expenses
From march 2011 to may 2011-Prepaid expenses
now it would be clear to you that fee from june 2010 to march 2011 only can be claimed.
From June 2010 to march 2011-Expenses
From march 2011 to may 2011-Prepaid expenses
now it would be clear to you that fee from june 2010 to march 2011 only can be claimed.
10 July 2013
SINCE UR CLIENT MUST BE MAINTAING BOOKS ON ACCURAL BASIS FULL FEES CAN BE CLAIMED IN FY 10-11.
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