12 May 2008
Dear Mr Panchal As far as it relates to calculation of profit for the purpose of income tax liability calculation it is well settled that the Income Tax is payable on total accrued income of the previous year. In your case the payment is for next three years and the expenditure made in advance is only prepaid expenditure. Prepaid expenditure is not deductible from Gross Total Income. relevant case law can be suggested on personal contact by email.