Interest on loan for Acquisition of Building ?
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 February 2011
Sir,
I have the following problem please tell me whether am I right in my opinion.
The assessee has taken loan for acquisition of Building on 1-4-2010. The business started on 1-12-2010. I bifurcated interest on loan into 2 components. Pre commencement and post commencement. Pre commencement interest I capitalised with the cost of building and Post commencement Interest I transferred to Profit and Loss A/c ?
Am I right ? If not What should be done ? Thanks in advance.
I have the following problem please tell me whether am I right in my opinion.
The assessee has taken loan for acquisition of Building on 1-4-2010. The business started on 1-12-2010. I bifurcated interest on loan into 2 components. Pre commencement and post commencement. Pre commencement interest I capitalised with the cost of building and Post commencement Interest I transferred to Profit and Loss A/c ?
Am I right ? If not What should be done ? Thanks in advance.
13 February 2011
Seems your understanding is correct.
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