TaxTMI 
TaxTMI 
Depreciation on expenditure for software development
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....epreciation on expenditure for software development<br> Query (Issue) Started By: - MALAYANUR PADMANABHARAO Dated:- 15-12-2018 Last Reply Date:- 17-12-2018 Income Tax<br>Got 2 Replies<br>Income Tax<br>We have established a software company. The objects of the company is to develop a software product useful for banks in digital banking. The company spent considerable amount over 5 years to develop ....
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....the software and till the product was ready company recognised as product development expenditure in the balance sheet. Most of the expenses incurred for salaries, etc., were treated as product development and in the fin.year brought out the product and selling in the market. Company did not claim on depreciation on this expenditure in any previous fin.years as per IT, but claimed depreciation at ....
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....the rate of 25% on the capitalised product of 5 years expenditure as an intangible asset under technical know how, patents, etc. Company has applied for patent of the product which is under process. Assessing officer negates that this is not an intangible assets and should have been claimed in respective assessment years of the expenditure incurred. Wish to know whether company's claim of dep....
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....reciation on the amount under intangible asset is correct or not. Reply By Ganeshan Kalyani: The Reply: Depreciation is allowed on the asset in the year in wich it is put to use . Reply By Ganeshan Kalyani: The Reply: Refer section 32 of Income Tax Act.<br> Discussion Forum - Knowledge Sharing ....