Tax deduction
This query is : Resolved
20 November 2012
sir ,
i have 1 doubt related to income tax deduction.If assessee has incurred an education expenditure , for upgrading the knowledge which will help him in his new project ...what will be nature of that expenditure? capital or revenue? can it be allowed as an expenditure u/s 37?
i have 1 doubt related to income tax deduction.If assessee has incurred an education expenditure , for upgrading the knowledge which will help him in his new project ...what will be nature of that expenditure? capital or revenue? can it be allowed as an expenditure u/s 37?
CA CS Amit S. Kedia
(Expert)
20 November 2012
It is revenue expenditure and be allowed as deduction in that year.
20 November 2012
k sir thanks ,
can u plz tell me the reasons why it is revenue exp?
can u plz tell me the reasons why it is revenue exp?
21 November 2012
Dear Siddhi,
There is very thin line between judging any expenditure as Revenue / Capital.
Expenditure incurred on education is revenue expenditure, & is allowable expenditure.
But though it will help assessee to enhanced knowledge about new project, he can treat expenses on Books / software / technical fees paid etc. as capital expenditure.
But it is challengeable assessee have to prove value addition to new project.
There is very thin line between judging any expenditure as Revenue / Capital.
Expenditure incurred on education is revenue expenditure, & is allowable expenditure.
But though it will help assessee to enhanced knowledge about new project, he can treat expenses on Books / software / technical fees paid etc. as capital expenditure.
But it is challengeable assessee have to prove value addition to new project.
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