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Tcs claim

Komal Kumari (47 Points)

06 December 2024

tcs paid on purchase of vehicle can we capitalise or not? also it is part of cost of fixed assets or not?

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Rama chary Rachakonda (Master in Accounts & high court Advocate) (8545 Points)
Replied 06 December 2024

TCS (Tax Collected at Source) paid on the purchase of a vehicle can be capitalized as part of the cost of the fixed asset.

Capitalization of TCS As per the Income-tax Act, 1961, TCS paid on the purchase of a vehicle can be capitalized as part of the cost of the vehicle.

Accounting Treatment In the books of accounts, the TCS paid on the purchase of a vehicle can be accounted for as follows:

1. _Debit_: Fixed Asset (Vehicle) account (including the TCS amount) 2. _Credit_: Bank/Cash account Disclosure in Financial Statements

The TCS paid on the purchase of a vehicle should be disclosed as part of the cost of the fixed asset in the financial statements.

GST Implications As per GST laws, TCS paid on the purchase of a vehicle is not eligible for input tax credit (ITC).

However, the TCS amount can be capitalized as part of the cost of the vehicle. Conclusion In conclusion, TCS paid on the purchase of a vehicle can be capitalized as part of the cost of the fixed asset.

It should be accounted for as a debit to the Fixed Asset (Vehicle) account and disclosed as part of the cost of the fixed asset in the financial statements.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (195465 Points)
Replied 06 December 2024

No. You can claim it back while filing IT return, so cannot be capitallized.

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