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Sfm query

Final 624 views 1 replies

one query from leasing chapter.

" In case of advance receipt of lease rentals (income for lessor) , we apply tax in the year of receipt, whereas we take the benefit of tax on lease rentals (expense for lessee) in the next year of lease."This is given in book of AN Sridhar .
 
But i think advance receipt of lease rent is not an income of lessor it is in the nature of "advance from customers" & tax liability will arise at the end of year.
Please go through my query, and reply as soon as possible.
Replies (1)

@ Neha , according to my undersatnding to your question as lease payments received by the lessor at the beggining of year(i.e T0),but tax will paid be at the end of the year.There is timing diffrence,hence tax effect given in the year.


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