Preoperative Expenses
This query is : Resolved
15 April 2009
What is the date of setting up of the business and commencement of the business? Where it will differ and what is the implication as per IT Act?
16 April 2009
The date of setting up of business or starting a business means the date on which actually the business is started. Whereas the date of commencement of business refers to date on which the person receives a certificate of commencement of business from the Registrar of the companies in the prescribed area. The date of commencement of business can be the same as the date of starting the business but in no case it can be before the date of starting the business. The expenditure before the commencement of business is treated as Pre-operative or preliminary expenditure and is allowed as deduction in parts over a specified period of time. The expenditure incurred after the commencement of the business is allowed as deduction fully in the same financial year.
16 April 2009
The date of setting up of business or starting a business means the date on which actually the business is started. Whereas the date of commencement of business refers to date on which the person receives a certificate of commencement of business from the Registrar of the companies in the prescribed area. The date of commencement of business can be the same as the date of starting the business but in no case it can be before the date of starting the business. The expenditure before the commencement of business is treated as Pre-operative or preliminary expenditure and is allowed as deduction in parts over a specified period of time. The expenditure incurred after the commencement of the business is allowed as deduction fully in the same financial year.
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