Kamlesh (Article Assistant) (181 Points)
07 May 2013Hi, my client, is a works contractor & Has purhcased a shop for business purpose.
Purchase cost - 1,50,000
Stamp Duty - 6,900
Stamp duty should be under which head in tally & Would that be treated as purchase cost?
What will be the journal entry??
& What if I sell this shop for 2,50,000/- & Registration fees 5000/-
What will be the treatment of statutory fees in both the cases??
Thanks in advance,,,,
Deena.Vanan
(Grad. CWA, ACA, CS(F))
(120 Points)
Replied 12 May 2013
At the time of purchase: Yes. Stamp duty can be taken as a purchase cost bcoz as per Para 9.1 of AS 10 if you pay any non-refundable taxes/ duties during purchase of a asset you can cosider the same as the cost.
Thus the entry will be:
Building A/c Dr 1,56,900
To Vendor A/c Cr 1,56,900
(Since stamp duty is added alongwith the purchase cost there is no need to create a seperate head)
At the time of sale: While selling the property you should treat the registration charges as expenses and the journal entry is as follows.
Customer A/c Dr 2,50,000
To Asset A/c 2,50,000
Registration fees Dr. 5,000
To Cash A/c 5,000
Anil Desai
(4 Points)
Replied 11 October 2017
STAMP DUTY REGISTRATION TALLY UNDER IN GROUP.
CAPITAL A/C THIS RIGHT NA
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