Land Development Charges

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This discussion clarifies the rules around cash payments for land development charges, specifically if payments exceeding Rs. 10,000 are allowable. Generally, cash payments over this limit are not deductible and may attract TDS. While land itself isn't depreciable, capital expenditures on it paid in cash could be disallowed for depreciation claims under specific tax sections.

SUDHEEP M

SUDHEEP M (Querist)
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23 November 2021 Sir,

Sir I want to know whether cash payment in excess of Rs. 10000 can be allowable in case of land development charges. Say for example I was incurred Rs. 30000 by cash for JCB Work on my land. Whether this can be allowable.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 November 2021 Any cash payment in excess of Rs. 10000/- is not allowed for deduction.
More over TDS would be deductible in such cases.

SUDHEEP M

SUDHEEP M (Querist)
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23 November 2021 Is it allowable to accumulate in land as assets. In case of depreciable asset it will attract disallowance for claiming of depreciation.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 November 2021 As per sec. 32 r.w.s. Section 43 of the Act disallows the capital expenditure incurred in cash. For Instance, purchase of Fixed Assets. Here land would not be affected as no depreciation is being claimed on it.

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