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Treatment of Pre-Incorporation Expenses

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30 October 2021 Sir, I want to know the treatment of expenses incurred before incorporation of a private limited company. Company was actually incorporated on 01-06-2021. But from 01-01-2021 expenses was incurred in the name of the company and that is too met by cash amounting to Rs. 10 lakh. Then how can I account this expenses in the books of account.
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
02 November 2021 Though preoperative expenses are capitalized. but in your case it will not be allowed for deduction, when paid in cash any amount more than 10000/-.
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