Treatment of Pre-Incorporation Expenses

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SUDHEEP M (Querist)
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30 October 2021 Sir, I want to know the treatment of expenses incurred before incorporation of a private limited company. Company was actually incorporated on 01-06-2021. But from 01-01-2021 expenses was incurred in the name of the company and that is too met by cash amounting to Rs. 10 lakh. Then how can I account this expenses in the books of account.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 November 2021 Though preoperative expenses are capitalized. but in your case it will not be allowed for deduction, when paid in cash any amount more than 10000/-.