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A/C treatment of ROC fee paid for increase of share capital

SANJAY (SERVICE) (26 Points)

03 November 2010

Hi,

Please guide on the matter.

How the accounting treatment will be done for ROC fees paid to increase the share capital. Will it be capitalised and amortised over a period like preliminary expenses or will be treated as revenue expenditure in the year in which incurred. If capitalised, in how many years can be amortised ?.

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6 Replies

CA Lokesh Pokharna (CA (Ahmedabad Bhilwara Chittorgarh)) (4128 Points)
Replied 07 November 2010

IT SHHOULD BE TREATED AS CAPITAL EXPENDITURE ,HENCE CAPITLISED AND AMORTISED IN THE PERIOD OF 10 YRS MAX

Ajay Garg (CA FINAL) (101 Points)
Replied 28 December 2010

period of amortisation will be 3 to 5 years

E.R.SIVAKUMAR (Practicing) (47 Points)
Replied 08 July 2011

It can be amortised if increase in share capital brings extention of new industrial undertakings, otherwise capitalised

CA Sudhir Maheshwari (CA) (270 Points)
Replied 15 July 2011

ROC expenses allowed for accounting purpose.however, it would not be allowed for income tax purpose.

Krishna Upadhya (Consultant-Tax Advisory Services) (53 Points)
Replied 16 July 2011

For the purpose of Accounting, ROC fee for increase in Share capital is to be expensed in the period of payment. Say, Rates and Taxes a/c--------Dr xxx

To Bank a/c xxx

For the purpose of Income tax, if the increase is for Paid up capital, its a revenue expenditure and allowed as an expenditure. If its for the increase in Authorised capital then its a capital expenditure and allowed in 5yrs U/s35D.

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