Dear All,
The Expenses incurred by a unlisted company in increasing capital at premium, are to compulsory required to setoff against share premium account as per sec 78? or
Can it be allowed to route through P&L account ?
Regards
Pavan.Jinuga
Menu
Share issue expenses
Replies (1)
As per provisions of sec. 78 of Companies Act,1956 , a Company can utilise amount collected through share premium in writing off issue expenses incurred by the company... The amount can also be used to write off any issue expenses in relation to debentures issued by the company....
Moreover, you cannot show in P&L , because if you show it will be disallowed as per sec 37(1) of Income Tax Act.. According to Income Tax Act, Exp. on raising equity share capital and preference share capital are not deductible as per sec 37(1). Only exp. on issue of bonus shares is deductible.. So you have only one option in case its a fresh issue you will have to write off those issue exp. to securities premium A/c only...
Hope you understood..
Recent Topics :
- Free Pre-Filing Tool to Match GSTR-3B vs GSTR-2B (
- MR AASHOK KUMAR SHARMA
- NIC codes for FIRMS registration of entity
- Register on Income Tax as CA
- Deduction In Employee Provident Fund
- This is a gift for all Chartered Accountants and P
- NRI, ITR-2 FY 2025-26: AIS Part B2 (SFT) shows hig
- Wallet query for GST.
- 25-26 exempted sales
- Hotel stay below Rs.1000/- GST applicable or exemp
Related Topics :
CAclubindia
