07-02-2009, 03:21 PM
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by awaisaftab</i>
<br />How the depreciation shall be charged, under ITO.2001, on assets which purchased on lease from banks and other financial institutions?
What is the concept of initial allowance? Is it applicable on leased assets?
Suppose a company has paid 300,000/-(25,000 per month although principal and interest varies in each installment but for simplicity we assume it) of principal amount of asset up to the year end and the total cost of asset is 1,050,000/-. At which amount the depreciation shall be charged?
Please quote relevant sections of income tax ordinance in the support of your views.
Best Regards
Awais Aftab
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear Awais,
Depriciation on Leased assets is not taken into account in regard with Income tax, since ITO treat every Lease as operating lease therefore Rentals are admisible completely. View Section 28(b) for details.
Initial allowance is an allowance offered to increase investment in eligible depriciable assets (the thinking behind this is to attract businesses to increase their capacities & productions which will contribute to GDP & will create jobs)
Any correction(s) are welcome
Regards,
<br />How the depreciation shall be charged, under ITO.2001, on assets which purchased on lease from banks and other financial institutions?
What is the concept of initial allowance? Is it applicable on leased assets?
Suppose a company has paid 300,000/-(25,000 per month although principal and interest varies in each installment but for simplicity we assume it) of principal amount of asset up to the year end and the total cost of asset is 1,050,000/-. At which amount the depreciation shall be charged?
Please quote relevant sections of income tax ordinance in the support of your views.
Best Regards
Awais Aftab
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear Awais,
Depriciation on Leased assets is not taken into account in regard with Income tax, since ITO treat every Lease as operating lease therefore Rentals are admisible completely. View Section 28(b) for details.
Initial allowance is an allowance offered to increase investment in eligible depriciable assets (the thinking behind this is to attract businesses to increase their capacities & productions which will contribute to GDP & will create jobs)
Any correction(s) are welcome
Regards,
