Govt Subsidy

CA Sandeep Kumar (Audit Assistant) (804 Points)

08 December 2010  

Dear members, here is my query, basically it is an accounts question, but tax component is included, i have posted here too, members can answer both also.. thanks..

Actual cost of capital asset- 1.75 cr

Govt subsidy received - 25 lakhs

PLease give the treatment w.r.t AS 6,10,12

on what amount depreciation will be calculated, is it 1.75 cr or 1.5 cr (1.75cr - 25lakhs)

Also, what is the Income tax treatment of 25lakhs received from govt..