Hii,
Can anyone please guide me on the following matters. I would just state the Background before putting my queries. The Company is Authorized Education Partner (AEP) of Microsoft Corporation and is incorporated on 12th July 2016. Being an AEP of Microsoft, the company is under the process of adopting colleges for the Skill development Program designed by Microsoft. So, the company is visiting schools and colleges, conducting meetings with the heads. Therefore, as of now, no revenue is generated. However, the company had started its operations from May 2016, i.e. to say the company had taken the office on rent from May 2016, the marketing team was in operation from May 2016. Payment of deposit for rental premises, rent, electricity, salaries, travel expenses from May to the date of incorporation were incurred by the Directors through their own funds. The Company’s bank account was opened after date of Incorporation.
1. How to account for the expenses incurred prior to incorporation? Can we show these expenses as Pre Incorporation expenses? If yes, Expense account will be debited but which account should be credited?
2. When will be the liability to deduct TDS arise? Before the company was incorporated, salaries and rent payments were paid through the Directors Savings Bank Account. And the director accounts were not liable to audit u/s 44AB in the preceding financial year.
3. Also guide for the Professional tax provisons.
CAclubindia
