Depreciation on leasehold land

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

14 May 2012 whether as per income tax act, depreciation is allowable on leasehold land when it is amortized in the books of accounts over the period of lease term.

CA Prashant Gupta

CA Prashant Gupta (Expert)
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14 May 2012 you cannot charge depreciation on lease hold land.

But you can amortize the lease premium over the lease period from the year of beginning of lease. It is allowable expenses.

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Querist : Anonymous

Querist : Anonymous (Querist)

15 May 2012 thanks dear for your response, but can you please tell me any supporting data to justify it, like any circular or a case law on the above subject.

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Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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15 May 2012 The amortisation of lease premium is an allowable expenditure under the Income Tax Act.

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Querist : Anonymous

Querist : Anonymous (Querist)

15 May 2012 sir, can you please quote any supporting provision or any circular or case law on the above subject, especially when it is related to leasehold LAND.

thanks in advance