Pvt. ltd. company

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Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2016 Running pvt. ltd. company (software), If profit of a f.y. invest in research & development purpose within the f.y then should i pay tax for it? also if get the loss from investment of profit amount, then should company pay tax to the government? please advice & help.

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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28 January 2016 If the R&D expenditure relates, to business of the company i.e. software, then you may claim such expenditure u/s 37 of the Income Tax Act, 1961. Do not name the account head as "R&D". Any software company needs to spends money on R&D to bring a new software. However, if you are going to apply for any copyright for the same, you need to capitalise such expenditure and can claim depreciation u/s 32(1)(ii).

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Querist : Anonymous

Querist : Anonymous (Querist)

28 January 2016 Actually we are website developing, php programming company. may i show the investment in r&d purpose to avail tax benefit?

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CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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28 January 2016 A software development company may have to capitalise R&D expenditure spent on development of software. On completion of development it is an intangible asset i.e. copyright and depreciation has to be claimed u/s 32 of the Income Tax Act.

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