10 December 2015
Software purchased can be capitalized if it Exceed Rs.5000/- & above . Normally Less than Rs.5000/- not considered for asset write off in P & L A/c.
Annual Renewal Charges of Software not be capitalized.
10 December 2015
Dear sir we purchased a Payroll attendanc sofware but it is not working and the provider is not responding can we still capitalized it.becase there are no future economic benefit from this software.
10 December 2015
cost is 20000. if it should be write off then is amt play any role. iam asking this becase you asked for the cost.and sir is there any limit in any AS of any other act for recognizing iasset that u mentioned 5000
10 December 2015
to the extent your. Profit will be reduced. other wise you can claim depreciation number of years but in this case you will claim in this year .
10 December 2015
Thax sir but logic of 5000 i could't able to understand. Many people gives this limit but when i asked for where it is given i did't receive any suitable answer plsss clerify sir.
10 December 2015
Rs.5000/- will be company policy not by the Department , Each organisation limit the amount 5000 or 10000/- less than that they will write off as the value of asset is Meager . if you group as Fixed Asset you have to MAINTAIN Asset Register with Asset TAG Number.
10 December 2015
1. If the software is not working, it can be written off fully in the year of purchase.
2. For income tax purpose also, cost of software can be a revenue expenditure. citation:- CIT Vs. Asahi India Safety Glass Ltd (2011) 203 Taxman 277(Cal).
3. Rs. 5,000 concept is mentioned in schedule XIV (proviso to clause 8)of the Companies Act,1956.
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