This Section Covers only following 2 Expenses 

 

1.Current Repairs of Plant and Machinery or Furniture

They should be Current Repairs

If they are in nature of Capital Expenditure,then not allowed as deduction .

Instead Depreciation available u/s 32

 

2. .Insurance Premium for Safety of  Plant and Machinery or Furniture  

 

 

Q1

Particulars Amt
Income 850000
Expenses 300000
Profit 550000

Suppose Expenses Include Repair and Maintenance Expense of 100000 which were actually Capital expenses on Increasing efficiency of machine

Depreciation on Machine is 15%

Calculate PGBP Income

-a-

Direct Method  
Income 850000

less

Expenses Allowed except Dep

 

200000

(300000-100000)  
Dep on Machine 15000
(100000*15%)  
Profit 635000

-ea-

Indirect Method

-a-

Indirect Method  
Profit 550000
Add  
Expense disallowed  
Capital Expenditure 100000
Expense Allowed  
Depreciation on machine 15000
PGBP Income 635000

-ea-

 

  1. Income Tax
  2. PGBP Income
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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