What is the criteria for software capitalisation?

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Gourav (Querist)
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20 October 2008 What is the criteria for software capitalisation?

Which things are required to keep in mind for determining whether the software expenditure is CAPEX or OPEX in nature?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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20 October 2008 Benefit of enduring nature has to be stablished.

Gourav

Gourav (Querist)
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22 October 2008

Gourav

Gourav (Querist)
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22 October 2008 Pls Reply

Gourav

Gourav (Querist)
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22 October 2008 Pls Reply........

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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24 October 2008 Has already been replied.

Gourav

Gourav (Querist)
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29 October 2008 Benefit of enduring nature has to be stablished- its ok

But if we don't have the tranfer or sale rights of softwre license?then
Pls explore in detail

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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30 October 2008 The benefit can be spread over licence period.

Gourav

Gourav (Querist)
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30 October 2008 Mr.S.Srinivasaraghavan

Pls don't reply if you are not clear on my question....

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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18 November 2008
Computer includes software:
The Appendix I to the Income-tax Rules was amended and the amended appendix provides that software is included within computer. In the latest appendix which is effective from assessment year 2006-07 onwards we find the following relevant entry:-
III. Machinery and plant
"5. Computers including computer software (see note 7 below this table) - 60%"
The note number 7 reads as follows:-
"Computer software" means any computer program recorded on any disc, tape, perforated media or other information storage device.
Thus, we find that computer software which is required to operate the computer for different functions is included within the meaning of computer for the purpose of allowing depreciation allowance.

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