Prelimiary Expenses - Please reply

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Shakthi (Querist)
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25 December 2010 Mr A, an assessee had incuredd Rs 25 lakhs as prelimiary expenses. Instead of claiming 1/5 th of the total in 5 years, he claimed 1/10th of the total expenses in 5 years.

so after the 5 th year, he had a balance not written off amounting to Rs. 12.5 lakhs.

Can the entrire balance be amorties in the 6 th year? IS it allowable under the income tax act? 35 D says has to be claime din 5 years. Can the balance be claimed now.

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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25 December 2010 if entire expenses have been claimed in the intial 5 years then additional claim not allowable.

In books balance amount can be amortised in the 6th year.

If company incorporatted before 31.03.1998 then deduction was allowable in 10 instalments.