subsidy received for machinery



assessee purchase machinery of 10000000 on jan and on the april he received govt subsidy of 3000000 how will he treat subsidy as in closing book of march he claim dep on 10000000.
 
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KVO Merau Kutchh

The subsidy is credited to P&L account and is taxable.

 
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as par As12 subsidy received for plant and machinery is reduced from value of actual cost of machine

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KVO Merau Kutchh

Yes you are correct, but also refer the following...

 

taxability-of-government-grants-an-analysis

 

icds-vii-government-grants

 

sutra.com/experts/column

 
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deduct the subsidy received in the year from the sale of wdv of the asset and compute depreciation accordingly.the grant will be recognized as income in the form of reduced depreciation charge.
 
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