Share capital
This query is : Resolved
Tejasvi gupta
(Querist)
15 December 2011
What is the treatment of 'expense on increase in authorised share capital' in books of accounts and income tax purpose?
CA. RICHI SAXENA
(Expert)
16 December 2011
Fees paid for increase in authorised capital is capital in nature and is not deductible u/s 37 as per many judgements given by high courts. So the expenses as such are required to be capitalised.
CA. Richi Saxena
CA. Richi Saxena
Tejasvi gupta
(Querist)
17 December 2011
Thank you for the above information, but what is the treatment of the same in books of accounts?
CA. RICHI SAXENA
(Expert)
17 December 2011
Debit Share issue expenses account and credit bank account. And thereafter use section 35D and deduct this amount in five installments in profit & loss account for the next five years.
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