Puja Prasad
(Semi-Qualified CA & Student)
(336 Points)
Replied 19 November 2016
Explanation 10 of Section 43 provides as under "Where a portion of the cost of an asset acquired by the assessee has been met directly or indirectly by the Central Government or a State Government or any authority established under any law or by any other person, in the form of a subsidy or grant or reimbursement (by whatever name called), then, so much of the cost as is relatable to such subsidy or grant or reimbursement shall not be included in the actual cost of the asset to the assessee"
Say Cost of a asset is Rs. 10 Crores. Assessee has received Rs. 6 Crores as subsidy from Govt.
Then Actual cost to the assessee shall be Rs. 4 Crores (=10-6)
Subsidy received of Rs. 6 Crores shall not form part of income of the assessee.
Had the subsidy received not related to assets then it would form part of income of the assessee.
Haritha
(CA Articles)
(66 Points)
Replied 25 November 2016
Hi,
There is another para in Sec 43(1) Explanation 10. Can you please explain me that also with examples.
Thank you.
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