A company incurs expenditure on new product development. The development is both hardware and software to go with it. The company capitalizes it as Intangibel Asset in balance sheet.
Questions;
1. Can the company claim this as revenue in tax assessment?
2. If the expenditure is classified as capital expenditure for tax purpose, will it be eligible for amortization or deprecation and if so under what head/
Will be grateful for your advice, regards
Dear Raman,
This is very Technical Issue whether Technical Know How will be capitalised or not. it depends upon various factors. gerenally Technical Know how is capitalised and depreciation is allowed under section 32 of Income Tax Act, 1961. please write me full detail of the case so that i can give you appropriate reply. my email id is sachinagarwalcallb @ gmail.com
Dear Raman,
in income tax of india allow depriciation on intengible assets on a flat rate of 25% on WDV of Block of Intengible Asset
but As per Sec-35A of Income Tax Act,1961 if the capital expenditure incurred on such integible assets is before the 1st April, 1988
than, is allowed to amortise equally over the period of 14 years or the expected life of the asset whichever is less
this is not my practical experiance and only my interpetation of bare Act
for further querry you mwy contact me at deepak.msap @ gmail.com
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