RTO & INSURANCE CHARGES

Guest

Posted on 01 July 2009

Hi Deepak

Both the charges to be routed through P/L a/c and these charges don't give any benefit of enduring nature as per AS 10 "Accounting for Fixed assets"

Kalpesh

Accountts & Income Tax

314 Points Posted on 01 July 2009

Sir,

RTO is one time tax and we can utilise it for next 15 years. cant we transfer RTO in capital assets?

Guest

Posted on 01 July 2009

Oh... RTO can be capitalised. sorry but didnt know of its nature.

praveen

Chartered Accountant

5709 Points Posted on 01 July 2009

boss it is simple

expenses having long term benefits are capitalised and those which are recurring or whoose utility is less than or equal to an year shall be routed to profit and loss account.

Yogesh Shah

Managing Corporate Finance

809 Points Posted on 01 July 2009

Hi dude,

I think, RTO tax should be capitalized & Insurance Charges should be charged to P&L A/c. (subject to - Car is used for a business purpose.)

RAMANJU

here to updating the knowledge

482 Points Posted on 01 July 2009

All kind of expenditures incurred in bringing the asset to put into use should be capitalised. In your case, Road Tax and Insurance charges incurred before the car put into use and the insurance charges also ( first time insurance)should be capitalised. Refer AS-10, "Accounting for Fixed Assets".