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Treatment of pre-incorporation of expenses

LLP 2681 views 2 replies

How do we treat Pre-incorporation expenses such as Legal charges for formation of LLP, Drafting LLP agreement, getting some registrations post incorporation but prior to start of business such as Import Eport Code, VAT etc to ensure smooth flow of business?

Pls do explain me the difference in the treatment as per Income Tax Act and Companies Act, 2013.

Replies (2)
As per companies act you can show full pre incorporation expenses in Starting year but as per income tax you can claim only 1/5th of total pre incorporation expenses up to 5 years.

Will there be any change if the expenses are related to Pre-operation expenses?


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