Depreciation claim value and accounting entries
This query is : Resolved
03 April 2020
Sir,
One I.t. assess made payment for construction of commerical building .
1.Cash payments Rs.7,50,000/- ( all payments are above 10000/- limit)
2.Rs.9,00,000/- through on account payee cheque.
Question:
Cash payment value Rs.7,50,000/- including construction account allowed or not.
Cash payments value amount depreciation claimed eligible or not and accounting entries passed.
One I.t. assess made payment for construction of commerical building .
1.Cash payments Rs.7,50,000/- ( all payments are above 10000/- limit)
2.Rs.9,00,000/- through on account payee cheque.
Question:
Cash payment value Rs.7,50,000/- including construction account allowed or not.
Cash payments value amount depreciation claimed eligible or not and accounting entries passed.
14 May 2020
Amendment of section 35AD.
13. In section 35AD of the Income-tax Act, in sub-section (8), in clause (f), after the words “shall not include”, the words “any expenditure in respect of which the payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees or” shall be inserted with effect from the 1st day of April, 2018.
Amendment of section 43.
16. In section 43 of the Income-tax Act, in clause (1), with effect from the 1st day of April, 2018,—
(a) after the proviso and before Explanation 1, the following proviso shall be inserted, namely:—
“Provided further that where the assessee incurs any expenditure for acquisition of any asset or part thereof in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees, such expenditure shall be ignored for the purposes of determination of actual cost.”;
(b) in Explanation 13, the following proviso shall be inserted, namely:—
“Provided that where any capital asset in respect of which deduction or part of deduction allowed under section 35AD is deemed to be the income of the assessee in accordance with the provisions of sub-section (7B) of the said section, the actual cost of the asset to the assessee shall be the actual cost to the assessee, as reduced by an amount equal to the amount of depreciation calculated at the rate in force that would have been allowable had the asset been used for the purposes of business since the date of its acquisition.”.
13. In section 35AD of the Income-tax Act, in sub-section (8), in clause (f), after the words “shall not include”, the words “any expenditure in respect of which the payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees or” shall be inserted with effect from the 1st day of April, 2018.
Amendment of section 43.
16. In section 43 of the Income-tax Act, in clause (1), with effect from the 1st day of April, 2018,—
(a) after the proviso and before Explanation 1, the following proviso shall be inserted, namely:—
“Provided further that where the assessee incurs any expenditure for acquisition of any asset or part thereof in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees, such expenditure shall be ignored for the purposes of determination of actual cost.”;
(b) in Explanation 13, the following proviso shall be inserted, namely:—
“Provided that where any capital asset in respect of which deduction or part of deduction allowed under section 35AD is deemed to be the income of the assessee in accordance with the provisions of sub-section (7B) of the said section, the actual cost of the asset to the assessee shall be the actual cost to the assessee, as reduced by an amount equal to the amount of depreciation calculated at the rate in force that would have been allowable had the asset been used for the purposes of business since the date of its acquisition.”.
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