Can discounts offered on digital services be classified as revenue or capital expenditure?

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Self employed
4 Points Joined May 2018

Hi, my name is Manju. 

I am offering digital services like selling courses for competitive exams. I give volume-based discounts and other promotional discounts to the students.

Can these discounts be classified as revenue or capital expenditure?

If yes, then should they be classified as revenue or capital expenditure?

If classified as capital expenditure, then how to calculate the depreciation rate?

Thanks.

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On 22 March 2019 at 20:53 Report
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7558 Points Joined November 2011
it will be classified as revenue expenditure.
you are offering service related to your business and giving discount in order to increase your business so it will be revenue expenses and not capital
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On 22 March 2019 at 22:27
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Self employed
4 Points Joined May 2018

Thank you for the clarification, Giridhar ji.

But why did the Income Tax department ask Flipkart to reclassify discounts as capital expenditure? 

"Income Tax department asks Flipkart to reclassify discounts as capital expenditure"

Read more at:https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/income-tax-department-asks-flipkart-to-reclassify-discounts-as-capital-expenditure/articleshow/62597949.cms

Thanks and Reagrds,

Manju

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On 23 March 2019 at 12:55


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