Depreciation and Power Generating Unit

Option of Method of Depreciation If SLM is opted then block of assets will not be made. If asset is sold in SLM of depreciation -Balance is Negative then it will be treated as Business profit -Balancing Charge -Balance is Positive then it will be treated as Terminal Depreciation an allowable expenses

Rebate on Deposit for Development of Tea, Rubber and Coffee

Deposit for promote processing and production 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

Continue Tea, Coffee, Rubber

As these are agricultural income and nonagricultural income. To find out agricultural and non-agricultural income, first deduction will be provided of this section then it will be bifurcated into two parts In subsequent years if such deduction is taken back on broken of condition then again it will be divided in two parts

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

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 be allowed @ 25%

Preliminary Expenses

Allowed to Indian Company and Resident Assessee Maximum 5% of Project Cost (in case of Company 5% of Project Cost or 5% of Capital invested, which ever is more Allowable amount will be deducted in 5 equal installments Compulsory Audit of Books of Accounts

License to operate Telecommunication Services Capital Expenditure Expenditures will be allowed in equal installments during license period If amount is paid in installments then the amount paid will be allowed in equal installments in the remaining unexpired period of license If license is cancelled then in the last year the balance will be allowed as terminal depreciation If sold then difference of selling value and balance will be treated as Business Profit/Loss and difference between selling value and cost / Indexed cost will be treated as Capital gain If part of license is sold then the amount received will be deducted from the balance of amount

Prospecting for certain Minerals

Only to Indian Company and Resident Assessee Capital Expenditure Expenditure incur in preceding four years except expenses on Land, Plant & Machinery Allowed in 10 Equal installments Carry forward of unabsorbed amount upto the 10th year Audit of Books of Accounts

Lump sum payment on voluntary Retirement Scheme

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

Expenditure on Scientific Research

In-house Scientific Research

For Current Business:

All Revenue Expenses All Capital Expenses ( Except Cost of Land) For Future Business (incurred in Just preceding 3 Years ) Revenue Expenses: -Salary of employees engaged in research -Material used for research purposes Capital Expenses - All Capital Expenses (except land )

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Company and In-house Expenses A manufacturing company produces an article other than mentioned in Scheduled Eleventh 200% of the following expenses will be allowed: All Revenue Expenses All Capital Expenses (except L & B ) On Building 100%

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Unabsorbed Capital Expenditure on Research: Current Year: From any head of Income except Salary Subsequent Years (unabsorbed Expenses) Same as unabsorbed depreciation

Sale of Assets Without any use in other Business:

(a) Selling value is not more than cost of asset:

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Less of the following will be Business Income:

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

(b) Selling value is more than by cost of 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 of Plant and Machineries at zero value. On sale same treatment will be given as discussed in the point of depreciation.

Thank

you Very much