16 April 2010
If a company engaged in IT services purchases RAM and other hardwares worth less than Rs.5,000 which increase life of computers by 1-1.5 yrs can be expensed off or should be capitalised? Total of such purchases over the year amounts to more than Rs.20 lacs.
16 April 2010
Can be capitalized and since the actual cost is less than Rs.5,000/- depreciation at the rate of 100% can be claimed under the Companies Act,1956 provided the aggregate cost of such items will not constitute more than 10% of the total actual cost of plant and machinery of the said company
16 April 2010
as per my advice its need to be expensed out as amount isv ery small as repair and maintanance exp. i hope its recurring amount of below INR 5k... no need to capitalise. as have to think from income tax point of view also..
CAclubindia
