ABC Limited purchased a machine for ₹ 10,00,000 plus GST @ 18%. It has been capitalized in the books at ₹ 11,80,000 (i.e. inclusive of GST paid). Accordingly, the depreciation was claimed @ 15% on ₹ 11,80,000 under the Income Tax Act. What is the amount of ITC to be allowed?
A. ₹ 1,80,000
B. 15% of ₹ 1,80,000
C. 85% of ₹ 1,80,000
D. ITC will not be allowed
Answer:D
ABC Limited purchased a machine for ₹ 10,00,000 plus GST @ 18%. It has been capitalized in the books at ₹ 11,80,000 (i.e. inclusive of GST paid). Accordingly, the depreciation was claimed @ 15% on ₹ 11,80,000 under the Income Tax Act. What is the amount of ITC to be allowed?
A. ₹ 1,80,000 B. 15% of ₹ 1,80,000 C. 85% of ₹ 1,80,000 D. ITC will not be allowed