Incorporation exp
This query is : Resolved
30 September 2013
hi all, can u please explain why incorporation exp are not allowed under invome tax..
30 September 2013
Dear Nandesu,
Incorporation expenses are allowed under 35D in five equal annual installments.
Incorporation expenses are allowed under 35D in five equal annual installments.
30 September 2013
Agreed with Expert......
Sec. 35 D : Amortization of Certain Preliminary Exp.
Where an assessee, being an Indian company who is resident in India, incurs, any Preliminary expenditure can claim deduction in 5 equal installment over a period of 5 years beginning with the previous year in which the business commence or the previous year in which the extension of the industrial undertaking is completed or the new industrial unit is commences production or operation. Do remember a foreign is not eligible for deduction u/s 35D even if resident.
The Preliminary Expenses means any Expenditure in connection with : -
(i) preparation of feasibility report;
(ii) preparation of project report;
(iii) conducting market survey or any other survey necessary for the business of the assessee;
(iv) engineering services relating to the business of the assessee:
Sec. 35 D : Amortization of Certain Preliminary Exp.
Where an assessee, being an Indian company who is resident in India, incurs, any Preliminary expenditure can claim deduction in 5 equal installment over a period of 5 years beginning with the previous year in which the business commence or the previous year in which the extension of the industrial undertaking is completed or the new industrial unit is commences production or operation. Do remember a foreign is not eligible for deduction u/s 35D even if resident.
The Preliminary Expenses means any Expenditure in connection with : -
(i) preparation of feasibility report;
(ii) preparation of project report;
(iii) conducting market survey or any other survey necessary for the business of the assessee;
(iv) engineering services relating to the business of the assessee:
30 September 2013
Perhaps due to the enduring benefit derived by virtue of the registration, the legislature has allowed to claim as business expenditure not in lumpsum but over a period of time as per section 35D of the Income tax act,1961.
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