Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

capitalise interest on capital of [partners

aasita (ACA) (387 Points)

25 August 2009

If bilder's construction work will get over over period of 3 yrs and during this period partners are allowed interest on their capital as per income tax rules.can we include interest paid to partners as part of WIP?

Reply
Follow
Share

3 Replies

llllVICTORllll (Internal Auditor) (511 Points)
Replied 25 August 2009

no you cant

Upgrade to CAclubindia Pro. Subscribe Now!

Radheyshyam Falod (CA) (416 Points)
Replied 25 August 2009

Yes u can otherwise there will only expenses and no income. So it will be capitalised.

shreyas (Student) (260 Points)
Replied 05 September 2009

Since the construction work is not completed et and the business activity is not started all the expenses incurred should be capitalised by transferring them to Pre operative expenses and the same should be written off over the period of three years after business activity starts...

Hence, interest on capital paid should also be capitalised in this case....