Tcs claim

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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Quick Summary
This discussion clarifies whether Tax Collected at Source (TCS) paid on a vehicle purchase can be capitalised as part of the fixed asset's cost. While generally it can be capitalised and debited to the Fixed Asset account, it's noted that TCS is not eligible for input tax credit under GST. However, there's a counterpoint suggesting TCS can be claimed back via IT returns, meaning it shouldn't be capitalised.

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.

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

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