In that case, the expense of rent will be allowed.
Is the point clear so far?
What should be the mentality?
If I would have done this expense, would the business have
run?
If I wouldn't have done, would the business have run?
You have to see this.
The expense related to business will be allowed.
There should be a revenue expense.
Keep this in mind.
There should be a revenue expense, not a capital expense.
What does revenue expense mean?
The same shop where you were doing your business, suppose,
the tap of that shop got damaged.
The tap of the sink got damaged.
To repair that tap, you spent Rs.
You installed a pipe, fittings, etc.
You called a plumber.
And you spent Rs. 500.
Now tell me, this expense of Rs.
is it done for business?
Indirectly or indirectly?
If you wouldn't have repaired that tap, water would have
kept flowing.
The water would have spread all over the shop.
The stock would have got damaged.
Would you have been able to do business?
You wouldn't have.
So, somewhere or the other, the expense related to your
business will be deducted.
You can deduct that expense from your profit.
Is it clear?
But I said, if it is a capital expense, capital expense
means, first, the amount of that expense is very high.
Secondly, the shape and size of your property makes a
difference.
For example, if it is a ground floor, your shop is on the
ground floor.
If you make it a higher floor, you will have two floors.
This is a capital expense.
You don't get a deduction for this.
You will get depreciation for this later.
Try to understand this.
We will discuss this later.
Capital expense creates an asset.
Always remember this.
Capital expense creates an asset.
When an asset is created, you will get depreciation for it.
You will get expenses for it.
But its name will be different.
Its name will be depreciation.
You will get a deduction for the normal revenue expenses
that you spend on a daily basis.
If we talk about a shop, you pay the municipal tax for that
shop.
You will get the expenses.
If you didn't pay the municipal tax, you would have sealed
the shop.
Do you understand so far?
If you get repairs done, you will get the expenses.
Sir, you are saying that
I am a tenant and I own a shop.
I have bought that shop as a tenant.
Assume that the shop owner pays the municipal tax.
If he repairs the shop, will he get a deduction?
Yes, he will get a deduction for the expenses.
For that also, the expenses will be allowed.
What will be his business?
Renting a shop.
The property is the same.
Your business is to run your business from there.
His business is to rent the shop.
He will get income from the rent.
But to earn that income, he must have spent some money on
repairs.
He will get a minus there.
Minus the money from his profit.
The owner can also get a deduction.
The tenant can also get a deduction.
This is the point.
But if it is a capital repair, if it is a capital expense,
it creates an asset.
When the asset is created, he will not get a deduction from
the profit and loss account.
His name will be changed to depreciation.
The depreciation will be allocated to his useful life.
What to do?
We will discuss it later.
Insurance expenses.
If I don't get insurance, the shop will catch fire.
My entire stock will burn.
If I get insurance,
I am getting it so that my business will run.
I will get a deduction from the expenses.
I will get a minus from the profit.
This is what is written in our points.
Where the premises are occupied by the associate's tenant.
Occupation of the premises.
Repairs etc.
You don't get a deduction from the capital nature.
This is what is written.
Sir, whatever you say is written.
Sir, I am saying that I do magic.
Whatever I say gets typed on the spot and it comes in front
of you on the spot.
Sir, how much do you fake?
Friends, that is why
I keep joking.
Because these are serious topics.
You should meet an income tax officer.
You will get to know what kind of person he is.
You should meet an accountant.
He is very serious.
My objective is that if I teach you serious topics, you
will get sleepless.
When I used to study,
I used to get sleepless.
Then I thought that I will teach it in an interesting way.
That is my effort.
I keep joking and make interesting things.
Sir, we were talking about repairs and insurance of
buildings.
Suppose there is a plant and machinery or a factory.
What happens in a factory?
Machines are installed.
The repairs of those machines are done.
Will I get the deduction of the expense?
If I don't repair that machine, will I be able to make my
stock?
No, I won't be able to make it.
It is very important that the machine is in good condition.
Because of this, the lubricant and the oiling, should I get
the deduction of that expense or not?
No, you will definitely get the deduction.
If you get insurance, you will get the deduction.
Provided that the machinery is used for business.
Ultimately, if you are using it for business, you will get
the deduction for business.
I told you about the example of 15 lakhs.
It was not related to business.
It was a personal expense.
You don't get anything for personal expense.
If it is related to business, you will definitely get it.
Here also, it is said that replacement or reconstruction.
Why? When you do the construction, if you make something,
your asset will be created.
You will claim the depreciation for that.
Sir, how many times will you repeat the same thing?
I am telling you this so that you get confused.
This section ends with this.
We will discuss depreciation in our next lecture.
What have we studied till now?
We are discussing about business and profession head.
We are saying that there is an accounting profit and that
accounting profit has nothing to do with income tax from
that profit.
We will make some adjustments in the accounting profit.
Secondly, head of income that if the income is coming in my
profit and loss account, it will be deducted.
Its treatment will be seen differently.
Now, we will have to see which expenses will be allowed and
which will be disallowed.
What are the allowances?
Rent, repairs, insurance, machine or building.
We have discussed about it till now.
There are many expenses that will be allowed.
As I will open this chapter, you will get to know about
other expenses.
Friends, keep your confidence strong.
The chapter is very interesting.
I will take you to that level where you can't even imagine.
Keep your confidence on me and more than that on yourself.
Thank you very much.