Repairs of rented building

Dear Pushpa,

Any repair or maintenance on a rented property can be deal as :

If the exp is such that we cant take it back while leaving the property like repairs, whitewash etc. then it should be enterd in a separate head " Leasehold Improvement" & should be write off in the period of lease.

But if any exp such as purchasing furniture, computer etc has been done which we can take back while leaving the property, then it should be dealt as a normal purchase & shown in company's fixed assets.

AND, TDS would definitely needs to be deducted in either case....

Hope, it will help you...!!!!

Dear Professional Friends,

Yes we all agree that it can be capitalised, but at present we do not have any handy documentation to that part and hence we are having our opinion on the base of experience. Even we are facing the same issue, some clients who has more risk bearing capacity use to capitalise and soom expenses it out as they dont want any litigations.

One thing was :

Guidance note on expenditure during construction period –

In the para of assets not owned by company – “……….If anyone incurs expenses on capital nature for which he is not owner, can capitalise the same and it would be appropriate to charge it over a period of 5 years…….”

This was a docuemnt, however not towards lease hold land but a sort of. But as a matter of fact this has also been withdrawn by the institute, however surely we can refer to.

Kindly share if we have any reference to any documents either by our institute or any legal body, or reference to any judgements.

Have a good Day !!!!!!!!!

Warm Regards

CA Yatik Shah