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Direct tax

rajendra (vilaage-mankiyawas) (67 Points)

08 January 2017

Dear Sir/madam, I am a Ca Final Student and I am gonna to study DT so please tell me correct method study of DT like

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manisha (cs) (1118 Points)
Replied 08 January 2017

i m not a ca final student but i wil suggest understqnd each topic if any problem post me or in forum.
try to question yourslf have u got good idea of the subject if ny trouble make me knw

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rajendra (vilaage-mankiyawas) (67 Points)
Replied 09 January 2017

Hey

can you tell me sec.43A. Please

manisha (cs) (1118 Points)
Replied 09 January 2017

Section 43A. Notwithstanding anything contained in any other provision of this Act, where an assessee has acquired any asset in any previous year from a country outside India for the purposes of his business or profession and, in consequence of a change in the rate of exchange during any previous year after the acquisition of such asset, there is an increase or reduction in the liability of the assessee as expressed in Indian currency (as compared to the liability existing at the time of acquisition of the asset) at the time of making payment-

(a) towards the whole or a part of the cost of the asset; or

(b) towards repayment of the whole or a part of the moneys borrowed by him from any person, directly or indirectly, in any foreign currency specifically for the purpose of acquiring the asset along with interest, if any,

the amount by which the liability as aforesaid is so increased or reduced during such previous year and which is taken into account at the time of making the payment, irrespective of the method of accounting adopted by the assessee, shall be added to, or, as the case may be, deducted from-
(i) the actual cost of the asset as defined in clause (1) of section 43; or
(ii) the amount of expenditure of a capital nature referred to in clause (iv) of sub-section (1) of section 35; or
(iii) the amount of expenditure of a capital nature referred to in section 35A; or
(iv) the amount of expenditure of a capital nature referred to in clause (ix) of sub-section (1) of section 36; or
(v) the cost of acquisition of a capital asset (not being a capital asset referred to in section 50) for the purposes of section 48,
and the amount arrived at after such addition or deduction shall be taken to be the actual cost of the asset or the amount of expenditure of a capital nature or, as the case may be, the cost of acquisition of the capital asset

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manisha (cs) (1118 Points)
Replied 09 January 2017

in simple language i mean in layman term when we buy asset in foreign currency in installment or deferred arrangment we record certain amt in book what due to exchange fluctuation real amt may be increase or decreased suppose u buy A when price was 1 lakh dollar nd exchange rate 45 rs per dollar so u record as per 45 rs per dolllar transaction now exchange rate 49 dollar when u paid actual amt or installmnt of defeered arrangmnt ur liability increase u need to add this extra increase in books of account to show at the end of financial yr ur true liability toward the asset is not 49 rs

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manisha (cs) (1118 Points)
Replied 09 January 2017

hope it clear ur idea

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manisha (cs) (1118 Points)
Replied 09 January 2017

we need fo adjust balance sheet on 31st march to show our real position if i bought a asst at 45 rs per dollar on jan and after 3 month 31st march balance shhet exchnge is 49 nd since i earlr recorded transaction at 45 rs per dollar but i have to make payment on april aftr 4 month frm jan
now it appae i recorded aaset at 45 rs per dollar but at 31st march exchnge is 49 rs per dollar so i will adjust balance sheet to show price 49 rs per dollar as on 31st march to reflct true position of mine

1 Like