Taxation of trusts
This query is : Open
30 May 2012
Suppose a trusts purchased a fixed asset say for Rs. 5,00,000, depreciation would be charged @ 10%.
Now which amount is a application of income
Rs. 5,00,000 (fixed asset cost)
or
Rs. 50,000 (depreciation amount)
Now which amount is a application of income
Rs. 5,00,000 (fixed asset cost)
or
Rs. 50,000 (depreciation amount)
30 May 2012
In case of trust both purchase of FA & depreciation there on is application of income..
30 May 2012
It means application of income is 5,50,000 in the year of purchase of asset.
30 May 2012
yes prabhat ,though it is double deduction.
30 May 2012
whether it is mandatory in the case of trust to charge depreciation?
30 May 2012
Yes Explanation 5 To Sec 32(1)Income Tax Act makes it mandatory for every assessee to claim depreciation.
12 September 2012
Sir again a query has raised on this topic.
How it will be treated and what entry will have to be pass in the books of accounts because either we classify asset under the group head “Fixed Assets” or under “Indirect expenditure”
I have suggested the following entries. Please tell me whether it is correct, if not, please suggest the entries.
1. Fixed Assets Dr. 5,00,000
(classified under head Expenditure and claim exemption u/s 11)
To Bank 5,00,000
2. Fixed Assets Dr. 5,00,000
(classified under head Fixed Assets and claim exemption u/s 11 as depreciation over it useful life)
To Capital Fund 5,00,000
How it will be treated and what entry will have to be pass in the books of accounts because either we classify asset under the group head “Fixed Assets” or under “Indirect expenditure”
I have suggested the following entries. Please tell me whether it is correct, if not, please suggest the entries.
1. Fixed Assets Dr. 5,00,000
(classified under head Expenditure and claim exemption u/s 11)
To Bank 5,00,000
2. Fixed Assets Dr. 5,00,000
(classified under head Fixed Assets and claim exemption u/s 11 as depreciation over it useful life)
To Capital Fund 5,00,000
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