Expenses deduction

Hii

1 to 4 Exp are allowed and in 5 only depreciation is allowed because these are Fixed Assets not exp.

Dear Sir,

You can claim all the expenses mentioned in the query except vehicle exp. and office laptops and computers. Law only allows depreciation on vehicle exp/laptops and equipment exp.

You can also claim the below expenses.

1) Either rent on building if rented or dep. on building

2) Dep. on furniture & fixtures and software's purchased for trading/research.

3) Office exp.

4) Stamp duty/contract/admin exp.for trading in securities.

5) Brokerage/comm.

6) Staff welfare

7) telephone/internet and mobile exp.

8) Subscription exp.

Thanks

Hi,

The following expenses you can deduct from profit:-

1. Rent and electricity bill

2. Salary of the staff

3. Stationary expenses

However, on below mentioned expenditure you can claim depreciation:-

4. Vehicle expense (assuming that vehicle was not hired by you and vehicle is maintained by you or company itself.)

5. Office laptops and equipment.

Hi,

You can deduct all the expenses mentioned above from your profit except on laptops and equipment. You can however claim depreciation on the same.

Regards,

Nikhil.

Hi,

All the below expense can be deducted if it's related to your business. However, for point number five, entire laptop cost and equipment cost will not be deducted. You can claim depreciation on the same.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

"expense can be deducted If it's related to your business". Law only allows all those expenses which are incurred to carry/run the business and not personal expenses. Proof is invoices in the name of business and such expenses are incurred to run the business. As the software will be used for trading in future which in itself is an sufficient proof that the expenditure has been incurred for the business only.

Hi,

There are no guildelines to it but from what you are mentioning, it can be easily concluded that it's for your business and hence the expense is deductible.

Hi,

The invoices for expenses should be in the name of business entity/sole proprietor. Expenses has to be paid through the entity's bank account (if paid cash expenses for more than 10,000). At the time of payment of salary to staff, proper TDS was deducted and accordingly, TDS return has to be filed.

In Short, you have to maintain the proper record of invoices.

Hi,

There are no specific guideline to it however you should be able to prove that the expenses have been incurred to run your business and that they are not personal in nature. Till the time you can prove that the expenses are related to your business, it should be fine.

Regards,

Nikhil.

Hi,

For more clarification on the above matter, please arrange a call.

thanks.

Try to get invoices for maximum expenses and do all the transactions through banking channel. For expenses up to 10,000 you can use cash. Even if you don't have invoice transactions from bank will save you.

Sir

Expense which are related to your business are considered as business exp

Try to have invoice copies in your business name

Some time due to any reason invoices are in other name such as proprietor / partner/ director / employee of company but ultimate use of the same is for business purpose then the same is allowed

Digital transactions are adequate proof of the expenses incurred by you.

Try to maximise bank transactions and where not possible try to get adequate proofs like receipts, bills etc.

Regards,

Nikhil

For digital transaction,voucher along with bank statement showing the amount deducted for expenses will suffice.

Hi

First 4 expenses can be claimed under income tax. However, laptop and equipment should be an asset for your business and only depreciation shall be allowed in respect of assets.

'related to business' would be as per general understanding.

Payments from banks would be sufficient to prove the expense genuineness. Maintain invoice copies/ bills for expenses; salary register for salary payments.

Hi,

1. dint understood.

2. You can take rent receipts from the owner or the rent agreement and bank statement will also be sufficient.

3. How small? You can take signature on cash receipts for small expense.

4. Yes.

For small, invoices, GST/ TAN is not needed.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com