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Preliminary expenses

Padma (Audit Manager) (63 Points)

19 June 2012

Hi friends,

Is there anywhere in Section 35D of the Income Tax Act, it is mentioned that the preliminary expenses are allowable only to the extent of Rs.5000/- allowable in equal amounts (Rs.1000) for five years?

If so, please tell me exactly where...

Thank you...

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1 Replies

ASHOK K V (Senior Executive) (21 Points)
Replied 19 June 2012

Hi,

U/s 35D of Income Tax Act, there is no restriction as to restrict the amount of preliminary expenses allowed is upto Rs.5000/-. However the amount of preliminary expense cannot exceed 5% of cost of project or Capital employed in case of Indian Companies or 5% of cost of project for resident non-corporate assessee.

thanks,

Ashok