TAXABILITY OF REFUNDABLE GOVERNMENT GRANT
This query is : Resolved
NIRMAL DAVE
(Querist)
26 August 2023
Dear All,
We have received general grant from the State Government for setting up a sorting plant.
We will have to refund the same grant to the Government after Five Years.
What is the tax treatment of such grant? Can We keep the such amount as reserve & surplus in balance sheet or we need to deduct such amount from fixed assets for calculating depreciation?
Thanks & Regards
Nirmal Dave
We have received general grant from the State Government for setting up a sorting plant.
We will have to refund the same grant to the Government after Five Years.
What is the tax treatment of such grant? Can We keep the such amount as reserve & surplus in balance sheet or we need to deduct such amount from fixed assets for calculating depreciation?
Thanks & Regards
Nirmal Dave
CA R SEETHARAMAN
(Expert)
26 August 2023
Keep it under liability to Government.
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