Rental Building Rennovation Exp

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This discussion explores the capitalisation of significant interior renovations made by a tenant to a rented building. The tenant is advised to debit 'Lease holding building' and depreciate the cost annually, referencing Explanation 1 to Section 32(1) of the Income Tax Act, 1961. The key question is whether standard depreciation or additional depreciation applies to these tenant capital expenditures.

RAJ

RAJ (Querist)
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24 March 2022 If A Takes a Building from B on Rent for 1L PM and make Interior for App 100L then how it will be capitalized by Tenant

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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24 March 2022 Capital expenditure to the tenant. Debit 'Lease holding building' and depreciate every year.
Inference :- Explanation 1 to section 32(1) of the Income tax Act,1961.

RAJ

RAJ (Querist)
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24 March 2022 Thanks please confirm normal depreciation will be charged or additional ?

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