Hi, my client, is a works contractor & Has purhcased a shop for business purpose.
Purchase cost - 1,50,000
Stamp Duty - 6,900
Stamp duty should be under which head in tally & Would that be treated as purchase cost?
What will be the journal entry??
& What if I sell this shop for 2,50,000/- & Registration fees 5000/-
What will be the treatment of statutory fees in both the cases??
Thanks in advance,,,,
At the time of purchase: Yes. Stamp duty can be taken as a purchase cost bcoz as per Para 9.1 of AS 10 if you pay any non-refundable taxes/ duties during purchase of a asset you can cosider the same as the cost.
Thus the entry will be:
Building A/c Dr 1,56,900
To Vendor A/c Cr 1,56,900
(Since stamp duty is added alongwith the purchase cost there is no need to create a seperate head)
At the time of sale: While selling the property you should treat the registration charges as expenses and the journal entry is as follows.
Customer A/c Dr 2,50,000
To Asset A/c 2,50,000
Registration fees Dr. 5,000
To Cash A/c 5,000
STAMP DUTY REGISTRATION TALLY UNDER IN GROUP.
CAPITAL A/C THIS RIGHT NA
CAclubindia
