Hi everyone,
One of our client has the following doubt , please help.
The client is manufacturing public company in pre production stage and wants to capitalize the income tax paid on Interest from FD.
Is this possible.
Thanks in advance.
4 Replies
Sourabh Sharma
(CS CA (Final) M.com NCFM Derivative Capital Market Mutual Funds)
(771 Points)
Replied 15 June 2009
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Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 15 June 2009
Even if you capitalise the income tax paid the same will not be an allowable expenses for the purpose of Income Tax. So better to write it off instead of capitalising. And also on what basis can they capitalise Income Tax paid?
PRAVEEN KUMAR
(MBA (Finance) B.Com.(P))
(3443 Points)
Replied 15 June 2009
Income tax paid can not be capitalised. you should write off the expenses every year
One more thing i saw in few companies.
they keep these two head
1. Provision for Taxation (Under Current Liabilities & Provisions)
2) Amount paid towards Income Tax. (Under Loans & Advances)
they keep these head stands till the assessment is complete. and as per assessment they accordingly write off the both head.
Thanks
Praveen
sahana Murthy
(Student)
(123 Points)
Replied 17 June 2009
It is an accounting treatment, My doubt is that can it be done?
Thanks to everyone who has replied.
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