Website Development - Capital or Revenue

This query is : Resolved

CA RAMESH KUMAR AHUJA (Querist)
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03 October 2008 Discuss the Website Development cost, its hoisting cost and cost incurred on structural modifications.

Whether this is revenue or capital in nature?

If a fixed asset; Under which head the same may be booked?

The rate of depreciation under Income Tax and the Companies Act?

The realisable value of one's own site is always NIL then why the same is carried at a value?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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03 October 2008 If underlying asset or enduring benefit is not there in an expenditure the same has to be written off. If an enduring asset results the period of enduring has to be explained satisfactorily.

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Querist)
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03 October 2008 No doubt it is of enduring benefit

CA Gaurav Khanna

CA Gaurav Khanna (Expert)
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03 October 2008 When you develop a website an asset in the form of software is created. It has enduring benifits. The realisable value one own site may not necessarily be NIL as it will depend upon the usability of the Site. Therefore I think the website development should be capitalised as software.