Subsidy of capital nature
This query is : Resolved
14 June 2013
I read in a book that subsidy of capital nature provided by the government is not taxable under Income-tax Act .. But if the government exempts you from paying interest for a loan taken for buying a fixed asset.. Will it be a capital subsidy or a revenue one ? Cause fixed asset is a capital asset but paying periodic interest is a revenue expenditure .. Pls explain in detail.. Thanks..
15 June 2013
Is there any requirement to quantify or to classify such amount?
.
The loan can be treated as interest free loan.
.
However, for academic purpose, till the asset is put to use, the notional amount of interest should be considered as a capital subsidy and thereafter till the repayment takes place, it would be treated as revenue subsidy.
.
.
The loan can be treated as interest free loan.
.
However, for academic purpose, till the asset is put to use, the notional amount of interest should be considered as a capital subsidy and thereafter till the repayment takes place, it would be treated as revenue subsidy.
.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
- Query regarding reporting of exempt foreign remuneration in ITR (AY 2026-27)
- FEMA/RBI treatment — Amazon.ca arbitrage (US buy, Canada sell, goods never enter India)
- Goods return by customer
- INWARD REMITTANCE FOREIGN
- CPC and SAC
- Account freezed for Ineligible ITC Scrutiny for GST Annual Return
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
