query

Keeping in mind the smallness of expenditure they have to be allowed as expenditure. However if there are a number of such tubes bought then it should be treated as a fixed asset.

ok

Agreeing with Mr. Praveen, i want to add that the companies following the significant accounting policies may charge 100% dep on the assets having cost of Rs 5000 or less individually.

For e.g. u have incurred an expenditure of Rs 500000 on the 2500 fluroscent tubes to be installed in the whole plant.

Since the cost of each tube is Rs.200. Therefore 100 dep may be charged in the year in which they have been shown as capitalised.  

thanks

Shikha

Dear Shikha,

Provision of allowing of full depreciation on assets less than Rs. 5,000/- is there in the Companies Act 1956 and not in Income Tax Act, 1961. For income tax purposes depreciation will be allowable at the specified rates only.

SMALL QUANTITY= MISCELLANEOUS EXPENSES/ OFFICE LIGHTING

LARGE QUANTITY= PURCHASE OF FURNITURE AND FIXTURE.

KINDLY CORRECT ME IF I AM WRONG!!!!
 

thanks aditya sir

Mr.Pradip, Tubelights are not Fixed assets....

Your answer :---

Expenditure on replacement of ordinary lights by fluorescent tube is revenue expenditure and should not be treated of a capital nature.(Addl. CIT v. india united mills ltd. [1983} 141 ITR 399 (bom.).
 

Yeah 100% allowable for  their life is one year or so..