treatment of mobile phone
This query is : Resolved
21 February 2011
can anyone please tell me exact treatment of following situation?
A pvt ltd company purchases mobile phones,laptops etc for use by directors.For mobile phones bills are cash memo bills.should it be capitalized?or transferred to revenue by debiting directors a/c or by debiting entertainment a/c etc?What shud b the treatment?
A pvt ltd company purchases mobile phones,laptops etc for use by directors.For mobile phones bills are cash memo bills.should it be capitalized?or transferred to revenue by debiting directors a/c or by debiting entertainment a/c etc?What shud b the treatment?
21 February 2011
Both should be capitalized.
21 February 2011
A laptop is not a perquisites and not taxale in the head of director. Company should capitalise the valuse of laptop and charge depreciation in every year.
Mobile phone should also be capitalsed and 10% of the cost of mobile will be treated as a perquisites in the hands of the director and tax shpuld be calculated accordingly.
Mobile phone should also be capitalsed and 10% of the cost of mobile will be treated as a perquisites in the hands of the director and tax shpuld be calculated accordingly.
21 February 2011
Thank u both of you.but is there any basis of 10%?
n wht about personal use made by directors?will it be taken care of?
n one more thing if mobiles are provided by company to other staff also even then it should be capitalized?
n wht about personal use made by directors?will it be taken care of?
n one more thing if mobiles are provided by company to other staff also even then it should be capitalized?
21 February 2011
Yes the basis of 10% is as per Income Tax Act. Please read section 17(2)(iv) of the IT ACT.
The same treatment even if mobile is provided to other staff
The same treatment even if mobile is provided to other staff
21 February 2011
Ok. Thank u so much sir for quick reply.
21 February 2011
Sunil sir?
can company take this benefit if bill is cash memo and not in the name of copmany?
i mean purchased by director for business.
can IT deptt object the same?
can company take this benefit if bill is cash memo and not in the name of copmany?
i mean purchased by director for business.
can IT deptt object the same?
21 February 2011
Yes the benefit can be taken in cash of Cash memo. Generally no name is mentioned in the Cash Memo
Even the name of director is mentioned in the cash memo in can be accounted in the books of the Company mention below the the name of the Director the name of the Company
Even the name of director is mentioned in the cash memo in can be accounted in the books of the Company mention below the the name of the Director the name of the Company
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