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Preincorporation expenses

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19 August 2012 What is the rule for writting off the preliminery/pre-incorporation expenses in the books of a private limited company. Is there any such rule in the compaqnies act or is it done as per the Income Tax act. please explain in detail?
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CA Amit Jaiswal

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CA Amit Jaiswal (Expert)
20 August 2012 The rule of 20% is for income tax purposes.

For books accounts you would have booked entire amount at the time of expenditure.

Further this will give rise to Deferred Tax.


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