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I had taken business loan of sum Rs 18 lakhs in the last financial year .. in this financial year i have closed that loan but last year i have not shown the processing fees can i show it this year.... while closing it
Replies (6)
as per the matching principle of accounts the income and expenses belonging to the same period can be claimed ... so last year expenses could not be claimed...
then how to take that entry
you can adjust it with capital or reserves
as per accounting principles you can account it in the normal way. however for tax purpose it wont be allowed
for the counting purpose debit whole processing fee to P &L . you can only show half as a current period and half as a last yr expense so spread it over the loan tenure same as interest. the half of the amount should be disallowed as a prior period items for the taxation purpose
1. Adjust the same against reserves or
2. Treat it as prior period item and the same will be dis allowed as per IT Act
2. Treat it as prior period item and the same will be dis allowed as per IT Act
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