Priya (Ca Final) (188 Points)
06 August 2013| Plz help me | |||||||||
| I want to file IT return of my uncle but I have some quries | |||||||||
|
He is salaried employee |
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| He purchase Mahindra vehicle Of Rs 431000/-for business in his own name and given to his brother for doing the business | |||||||||
| He take loan of Rs 362000/-from financial institution ,he is also pay insurance charges Rs21090/- ,RTO Rs 15900/- | |||||||||
| Monthly EMI is Rs 11000/- | |||||||||
| My question is that which value taken in Fixed asset ,how much deprecition debited in P& L | |||||||||
| & for car loan deduction is allowed ?? | |||||||||
CA Suri Kota
(Assistant Manager @ EY)
(955 Points)
Replied 06 August 2013
Hi,
You can take the Interest portion out of EMI as your business expense. Depreciation should be taken at IT Dep rates.
If the vehicle is used for cab services, please consider dep @ 30% else @ 15%. Also please add the relevant exp incurred during the purchase of vehicle to its gross block before you depreciate.
Suri,
CA Suri Kota
(Assistant Manager @ EY)
(955 Points)
Replied 06 August 2013
and certainly , you need to file ITR 4.
Priya
(Ca Final)
(188 Points)
Replied 06 August 2013
Vehicle pur on 5.6.2012 so depriciation calcuated full year or 9 months ,,insuance ,rto expense this expenses included in cost of the asset then under P& L its shoen or not???
CA Suri Kota
(Assistant Manager @ EY)
(955 Points)
Replied 07 August 2013
As per IT Act, if an asset is put to use for more than 180 days, then you can claim 100% dep rate. Hence you can take total depreciation instead of pro rata basis.
You cannot show the insurance / RTA expense again in P&L once you capitalise.
Suri.
Priya
(Ca Final)
(188 Points)
Replied 07 August 2013
Insurance is on renewal basis so it is capitalised or expenses???
EMI paid in cash so are interst allowed as expense ???
CA Suri Kota
(Assistant Manager @ EY)
(955 Points)
Replied 07 August 2013
Its a choice which you can choose. Either you can capitalise else you can straightway hit the P&L.
Anyways insurance exp from the second year wil hit only P&L. To maintain consistency, you can do the same even in first year also.
All business exp paid in cash are limited by sec 40A(3) read with rule 6DD (Max of 20k per day). As the EMI is 11000, i think interest would be around 7k. Hence there is no problem even if you pay the EMI in cash.
Suri
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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