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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
View Answer| Direct Method | |
| Income | 850000 |
|
less Expenses Allowed except Dep |
200000 |
| (300000-100000) | |
| Dep on Machine | 15000 |
| (100000*15%) | |
| Profit | 635000 |
Indirect Method
-a-
| Indirect Method | |
| Profit | 550000 |
| Add | |
| Expense disallowed | |
| Capital Expenditure | 100000 |
| Expense Allowed | |
| Depreciation on machine | 15000 |
| PGBP Income | 635000 |
