Pending capital advance received and paid

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sireesha (Querist)
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28 December 2011 sir / madam

please tell me the treatment of capital advance paid and received in case of purchase of fixed assets in tax and accouts.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 December 2011 The advance paid will reflect in the balance sheet under the head loans and advances.

Depreciation will not be allowed on such advance.

In the year in which the asset is actually received, advance will be adjusted at the time of final payment.

In that year depreciation will be allowed on the total cost of the asset.

Advance received shall be reflected as advance in the Balance Sheet.

It will be treated as income in the year in which you deliver the asset.

sireesha

sireesha (Querist)
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29 December 2011 thanks for the answer

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