Dear Sir,
I am setting up a business on a rented property in a partnership with my mother and brother.
All the pre incorporation expenses have been incurred by me, I want to know the tax treatment of renovation expenses.
1. Should I capitalise them or treat them as revenue expenses.
2. All the invoices from the vendors are on my name, will this create any problem while claiming deduction/ depreciation.
Regards
CA Apurv Agarwal
1) Accounting treatment of the renovation expenses depends on the nature of renovation done in the premises. If the Renovation is of permanent nature, then the same should be capitalised and depreciation should be claimed.
2) You being the partner of the firm, there is no problem even if the bills are in your name. Depreciation can still be claimed.
Regards,
Devendra Kulkarni
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
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