Hi All,
A Director incurred Rs.30,000/- for formation of Company.paid to CA.
How to record in the books of Accounts and how to write-off as per companies act,2013
Thanks
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Pre-incorporation expenses
Replies (12)
As per sec 35D expenditure incurred before the commencement of his business can be possible to treat as preliminary exp.
In your case CA fees can be treated as feasibility report or project report.
Than this amount should be write off on 5 successive years.
In your case CA fees can be treated as feasibility report or project report.
Than this amount should be write off on 5 successive years.
As per the Latest Companie act 2013 All Preliminary Expenenses Should be Writeoff 100 % in same Year. However 1/5 Can be Claimed as per Income tax Act u/s 35D
yes, Mr Rahul define properly.
means show it as legal & professional expenses .what will be the entry.
Professional Expenses A/c .............Dr.
credit .............which account ?
Thanks
whether show it as loan from director.
thanks
Preliminary Exp A/c Dr
To Bank/ Party"s name
To Bank/ Party"s name
whether it can shown as loan from director,since director has paid it from his pocket.
In such case... one more entry for the loan amount shall be made....
Bank Dr 30
To Loan from Director 30
Preliminary Exp Dr 30
To Bank 30
Bank Dr 30
To Loan from Director 30
Preliminary Exp Dr 30
To Bank 30
Whether it to be shown
1.Payment to Auditor or
2.to be shown in Legal & Professional fees
in other expenses
Hello,
For passing journal entry, just pass entry as:
Preliminary exp dr.
to loan from director's
In narration mention that the expense pertain to Auditor's fee for reports.
Also see to the fact that these expense will attract deferred tax, as treatment in books and tax will defer.
Then for next five yrs pass entry as:
Preliminary exp written off
To Preliminary exp
Hello,
For passing journal entry, just pass entry as:
Preliminary exp dr.
to loan from director's
In narration mention that the expense pertain to Auditor's fee for reports.
Also see to the fact that these expense will attract deferred tax, as treatment in books and tax will defer.
Then for next five yrs pass entry as:
Preliminary exp written off
To Preliminary exp
Hello,
For passing journal entry, just pass entry as:
Preliminary exp dr.
to loan from director's
In narration mention that the expense pertain to Auditor's fee for reports.
Also see to the fact that these expense will attract deferred tax, as treatment in books and tax will defer.
Then for next five yrs pass entry as:
Preliminary exp written off
To Preliminary exp.
Show it on asset side of Balance sheet and the writtten off amount in P&L.
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