section 35 D of income tax act

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Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2011 hi

can any one explian me on section 35(d) of the income tax act.Suppose the company has Rs. 7,00,0000 as paid up capital and expended Rs.35 lacs as incorporation expenditure and company can claim this expenditure subject maximum 5% of capital employed which comes around Rs.35000 and claimed for 3 years.Suppose after 3 years company increases paid up capital Upto Rs.25 crores whether company can claim expenditure on maximum subject to 5% of 25 crores as out of 35 lacs 35000 rupees only claimed and remaining be calculated on recent paid up capital

urgent---------pls

NITIN SABOO

NITIN SABOO (Expert)
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29 April 2011 as per section 35d 5% should be of Capital Employed or Cost of project for indian company at the end of year of incorporation. Hence, 5% will be of opening paid up capital only and not increased one.