Urgent accounts query

Fixed Assets. if for long time use at site.

This should be capitalied and shown under Fixed Assets

but these are made of plastic sheets , suspectable to wear and tear, how could these be capitalised and its cost is rs.5500

under the Income tax act, there is a provision stating that a fixed asset worth Rs.5000 or less be depreciated @ 100%. since this is small amount u can show it as direct expense.

Agree with Falgun, even if it above Rs. 5000 still you can treat it is revenue expenditure...

Agreed.....It shall be treated as a revenue expenditure only. Moresoever , a Flex board would also not have a long life...

Originally posted by : Phalgun
	under the Income tax act, there is a provision stating that a fixed asset worth Rs.5000 or less be depreciated @ 100%. since this is small amount u can show it as direct expense.

Fully Agree with this .

Its a direct expenses.

Dear Friends..

Items below Rs.5000/- can be fully allowed as depreciation as per Companies Act and not in Income Tax Act.

In this case,its revenue expenditure. Its not asset though it serve long year. We might have heard or studied about "deffered revenue expenditure" and it belongs to such category. For example take purchase of stationery like File, Folder.. is it asset or Revenue Expenditure? Like that its a revenue expenditure and to be expensed in same year.

It shouldn't be capitalized & charged to revenue account.