Dep.on software
This query is : Resolved
CA Sanjay Baheti
(Querist)
11 June 2011
An assessee has purchased Tally software and another ERP software. What is the dep. rate under Income Tax? 60 percent or 25 percent as applicable for intangibles?
CA PARAS BAFNA
(Expert)
11 June 2011
Computer Software is no way a asset as it is to be upgraded every year and for that renewal charges are to be paid.
I think , in-spite of treating it as an asset, from income tax point of view, we should debit it as an expense.
If you do not think it proper, charge depreciation @60%
I think , in-spite of treating it as an asset, from income tax point of view, we should debit it as an expense.
If you do not think it proper, charge depreciation @60%
12 June 2011
Madras High Court in the case of CIT Vs. Southern Road ways Ltd reported in 304 ITR 84 said replacement cost of software,though there is enduring benefit, is revenue expenditure.
Pl go through the decision and try to equate with your case.
Pl go through the decision and try to equate with your case.
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