Accounting of rental income
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
24 September 2011
If a firm has rental income by leasing out machinery and for 4 months it is unable to receive the rent and receives rent for only 8 months then whether the accounting of rent can be done on cash basis or mercantile system has to be followed? In effect the firm has not received the rental income for 4 month and received only for 8 months so what should be the treatment in accounts. Also what impact to be taken care of in Income Tax? Please suggest the effective way since assessee firm might end up paying tax on income which it has never earned.
26 September 2011
Please mention the person as Assessee ?
Who is assessee an individual, company or partnership and also whether he is business of leasing o oit is one time leasing
Who is assessee an individual, company or partnership and also whether he is business of leasing o oit is one time leasing
26 September 2011
If in the previous year your client has followed the cash system of accounting then yeas but if since pas several years it is following mercantile system of accounting then you have provide the rent for 12 months irrespective of whether rent has been received or not.
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