profits&gains from b/p

8/22/2019 PROFITS&GAINS FROM B/P

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Depreciationand Power

Generating Unit Option of Method of Depreciation If SLM is opted then block of assets will notbe made. If asset is sold in SLM of depreciation-Balance is Negative then it will be treated asBusiness profit -Balancing Charge

-Balance is Positive then it will be treated asTerminal Depreciation an allowable expenses


3/16

Rebate on Deposit foR Development of tea,RubbeR anD Coffee Deposit for promote processing andproduction of Tea, Coffee and Rubber With NABARD or respective Board Rebate: (a) Amount deposited(b) 40% of business profit which ever is

less Withdrawal from the account Restriction on transfer of asset Compulsory audit of accounts from CA


4/16

As these are agricultural income and non-agricultural income. To find out agriculturaland non-agricultural income, first deductionwill be provided of this section then it will bebifurcated into two parts In subsequent years if such deduction istaken back on broken of condition then again

it will be divided in two parts

Continue Tea, Coffee, Rubber


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site RestoRation funD For the development of Petroleum and Gas Agreement with Central Government Deposit of amount with SBI Rebate: (a) Amount deposited with SBI(b) 20% of Profit Which ever is less Amount should be utilised according to the scheme Assets acquired from the account should not be

transferred in the next 8 years


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expenses on patent Right Capital Expenses Incur upto 31st March,1998:

14 equal installment or life of patent,which ever is lower period

Incur after 31st March,1998:Intangible asset and depreciation will beallowed @ 25%


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pReliminaRy expenses

Allowed to Indian Company and ResidentAssessee Maximum 5% of Project Cost (in case ofCompany 5% of Project Cost or 5% of Capitalinvested, which ever is more Allowable amount will be deducted in 5 equalinstallments Compulsory Audit of Books of Accounts


8/16

liCense to opeRateteleCommuniCationseRviCes Capital Expenditure Expenditures will be allowed in equal installmentsduring license period If amount is paid in installments then the amountpaid will be allowed in equal installments in the

remaining unexpired period of license If license is cancelled then in the last year the balancewill be allowed as terminal depreciation If sold then difference of selling value and balancewill be treated as Business Profit/Loss and differencebetween selling value and cost / Indexed cost will betreated as Capital gain If part of license is sold then the amount received willbe deducted from the balance of amount


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pRospeCting foR CeRtain mineRals

Only to Indian Company and ResidentAssessee Capital Expenditure Expenditure incur in preceding four yearsexcept expenses on Land, Plant & Machinery Allowed in 10 Equal installments Carry forward of unabsorbed amount upto

the 10th year Audit of Books of Accounts


10/16

Lump sum payment on voluntaryRetirement Scheme

Payment made will be allowed in 5 equalinstallments from the year in which paymentis made. If payment is made several times, all will betreated separately and will be allowed in 5equal installments


11/16

Expenditure on Scientific Research

In-house Scientific Research

foR CuRRent business:All Revenue ExpensesAll Capital Expenses ( Except Cost of Land)foR futuRe business(incurred in Justpreceding 3 Years )Revenue Expenses:-Salary of employees engaged in research-Material used for research purposesCapital Expenses- All Capital Expenses (except land )


12/16

Continue

Company and In-house ExpensesA manufacturing company produces an articleother than mentioned in Scheduled Eleventh200% of the following expenses will beallowed:

All Revenue ExpensesAll Capital Expenses (except L & B )On Building 100%


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Unabsorbed Capital Expenditure onResearch:

CuRRent yeaR:From any head of Income except Salarysubsequent yeaRs (unabsoRbeD expenses)Same as unabsorbed depreciation

Continue


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Conn

sale of assetsWithout any use in otheR business:(a) selling value is not moRe than Cost of

asset:Less of the following will be Business Income:

(b) selling value is moRe than by Cost of asset:

Sale Value + Deduction for such asset Cost of such assetORDeduction allowed for such asset

Selling Value Cost of Asset /indexed cost of asset= STCG


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asset is useD foR otheR business:It will be added to the respective Block ofPlant and Machineries at zero value. On salesame treatment will be given as discussed inthe point of depreciation.

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Thank you

Very much

profits&gains from b/p

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