Question ID :
44759
Land Lease Charges
Whether land lease charges paid upfront for future period (say, for next 50 years) allowable under IT Act over the same period?
Posted by
balasubramanian
on
Dec 16, 2024
Filed Under
DIRECT TAXES
Since the benefit of the lease extends over the entire period (e.g., 50 years), the deduction cannot be claimed fully in the year of payment.
Instead, the expense is required to be amortized over the lease period and claimed proportionately each year.
According to Accounting Standard (AS) 19 or Ind AS 116 for leases, upfront lease payments are treated as prepaid expenses and amortized over the lease term.
Posted by
CA. SURAJ KUMAR CHOUDHARY on
Dec 16, 2024
Answer ID :
85532
to be amortised over the lease period. Only the expenditure relatable to the year can be claimed
Posted by
SIVADAS CHETTOOR on
Dec 24, 2024
Answer ID :
85541
Whether Land lease charges are diferent from Lease Rentals? If yes, whether the calculation is made considering future benefits? If no, you can claim as current year expenditure, as it is one time payment. On the other hand, if it covers future period of Lease, you can't claim in one year and it has to be spread to future years.
Posted by
Rupakula Rajasekhar on
Dec 31, 2024
Answer ID :
85549
yes...can claim proportionatly
Posted by
SIVADAS CHETTOOR on
Jan 02, 2025