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Depreciation on new car

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B.Com
37 Points Posted on 19 September 2013

I have purchased for my Business new car in September 2013 on which i am entitle of 15% depreciation for A/C year 2013-14.

My query is RTO Tax & Municipal Tax is allowable under expense in P & L , like Insurance of the car ? Please advise !

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On 19 September 2013 at 10:31 Report
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Service
7576 Points Posted on 19 September 2013

All the taxes, Insurance paid for a vehicle should be capitalized for first time.

6 Reply
On 19 September 2013 at 11:52
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ACA
1006 Points Posted on 19 September 2013

ya i agree with Rajesh

5 Reply
On 19 September 2013 at 12:24
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Student CA IPC / IPCC
28 Points Posted on 19 September 2013
Rajesh @ than what about second time?????
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On 19 September 2013 at 12:45
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Student CA IPC / IPCC
29 Points Posted on 19 September 2013
Debit it under profit and loss account
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On 19 September 2013 at 12:50
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Service
7576 Points Posted on 19 September 2013

After first time all the expenses related to Insurance & Taxes should be treated as revenue expenses and debited to P/L account.

6 Reply
On 19 September 2013 at 13:02
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ARTICLE ASSISTANT
102 Points Posted on 19 September 2013
First time .....capitalize all expenses & take depreciation on that & After first time.....repairs & insurance will be alowed as expense
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On 19 September 2013 at 16:22
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Student CA Final
35 Points Posted on 20 September 2013
for e.g. if the car has been purchased in January and RTO registration and other expenses like insurance were incurred in Feb or in any other month then will we capitalize them..?
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On 20 September 2013 at 08:00
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Qualified Assistant
22 Points Posted on 20 September 2013
yes...the same needs to be capitalize because as per rules u can,t use the vehicle without incurring these onetime registration exp.
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On 20 September 2013 at 09:59
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student
42 Points Posted on 20 September 2013
For first time treat insurance and taxes as revenue and afterwards treat all expenses like repairs as debit in P/L ac
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On 20 September 2013 at 11:06
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article assistant
41 Points Posted on 25 September 2013
If those are mandatory for payment at the time of purchase or it is One time only at the time of purchase then it should be capitalised
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On 25 September 2013 at 17:45
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Job
240 Points Posted on 26 September 2013
Agree to Rajesh...income tax act works on the principle of PUT TO USE. In case of car put to use is possible only afrer incurring initial exp. Like road tax, insurance, any other tax. After wards whatever is the expenditure for insurance etx. Occurs it should be treated as revenue expenditure. Hope it clarifies.
6 Reply
On 26 September 2013 at 21:32


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