GK
TAXES IN INDIA
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Full
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5 equal annual installments
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10 equal annual installments
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None of these
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Detailed explanation-1: -The total amount of deduction, as calculated above, will be available as a deduction in five equal instalments. The instalments will begin from the previous year in which business is commencement or extension of the undertaking is completed or new unit commences production/ operation.
Detailed explanation-2: -5% of capital employed-applicable to a company (capital employed= paid up capital+debentures+long term borrowings as on the last day of the previous year) The amount so calculated above shall be allowed as a deduction equally over a period of 5 years.
Detailed explanation-3: -For the useful life of the assets. The Companies Act & Schedule VI provides for recognition of 1/5th of the total preliminary expenses each year for five consecutive years.