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Tax amortisation

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yasaswi gomes

My grammar is 💯 good I

5110 Points Posted on 19 September 2021

Hi,

All expenses like site preparation, installation and labor charges are treated as cost of machinery and depreciated. Does tax depreciation include these capitalised expenses as part of cost of machinery?

Some intangible assets are capitalised and amortised. Is this amortisation tax deductible from taxable income as per IT act?

Txs

Replies (2)

Quick Summary

This discussion clarifies how expenses such as site preparation, installation, and labour are capitalised as part of machinery cost and subsequently depreciated. It also addresses whether amortisation of capitalised intangible assets is tax deductible under the IT Act. The consensus is that expenditure incurred until an asset is put to use is capitalised and depreciated, while post-use expenses are expensed off, with amortisation/depreciation allowed as per the IT Act.

JGM

Knowledge Sharer

285 Points Posted on 23 September 2021

Expenditure incurred on capital asset till the time it is put to use should be capitalsed. The depreciation on the same is allowed. Any expenditure incurred post the asset is put to use should be expensed off.

The amortisation / depreciation as per IT Act will only be allowed