Question: An assessee incurs capitals expenditure on rented premises. Which of the following statement is correct-
(a) He can claim this expenditure as revenue as it relates to rented premises
(b) He cannot claim depreciation on this expenditure, because he does not own the premises
(c) He can claim depreciation on this expenditure
(d) The owner of the premises can claim depreciation on such captial expenditure.
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Capital expenditure on rented premises
Replies (9)
Quick Summary
He can claim dep.
(c) He can claim depreciation on this expenditure
Yes Depreciation can be claimed
C is the answer
Depreciation can be claimed
A capital asset let out for rent and capital expenditure for the purposes of increase in the cost of asset.
Such capital expenditure can be allowed as business expense provided it has probability in near future to increase the earning capacity /furtherance of business.
Such capital expenditure can be allowed as business expense provided it has probability in near future to increase the earning capacity /furtherance of business.
As per Section 32.Explanation 1-Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work, in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee..
So the answer will be(c).
Yes , he can claim depreciation on this expenditure.
It depends on the rent agreement
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