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of <h1>Telex Security Deposit: Deductible Revenue Expenditure Per Income-tax Act, 1961; Refund Treated as Income.</h1> The circular addresses the treatment of a Rs. 10,000 security deposit required for a Telex connection under the Income-tax Act, 1961. As per the Indian Telegraph Rules amendment effective from February 26, 1983, this deposit covers part of the equipment cost and protects against unpaid dues. The Board considers this deposit as a revenue expenditure deductible in the year paid, provided the assessee claims it. When the deposit is refunded upon termination of the Telex connection, it should be treated as income in the year of refund.
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