state govt allowed to operate to hospital on PPP basis and has right to operate for 33 yrs. and the company did the operation and management agreement with their own trust for 33 yrs and all the expenditure for building are treated as revenue expenditure on the basis that we have only operation and management contract that's y after 33 yrs we have to vacate that place and therefore it is revenue expenditure.
whether it should be capitalised or not..?
1 Replies
Prakash Gehani
(Consultant & Teacher(Whatsapp 8718057907)
(1306 Points)
Replied 31 December 2018
as per income tax act you can claim either depreciation on such expenditure or charge to revenue fully in one year. As in case of trust you need to spend 85% of your receipts. Deduction is allowed on the basis of amount spent whether it is revenue or capital or revenue expenditure.
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