Capital expense or revenue expense

A/c entries 495 views 1 replies

Rudrayani Shedjale

Assistant Accountant

751 Points Joined May 2012

Amount paid for increase in authorized capital (for which we have got GAR-7 challan for filing form 5 & 23) should be considered as capital expentiture or revenue expenditure?

Also explain under which group it should be accounted??

please guide.

Replies (1)

CA Deepesh Ruhela

Keen to Learn

3271 Points Joined August 2010

As decided in Punjab State Industrial Development Corporation Ltd. (SC). It is not a revenue exp. And is not deductible. You can charge it from profit and loss account for accounting purpose but in computation of taxable income, it ll be disallowed.