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Whether capital expe or revenue expe

(Querist) 05 December 2013 This query is : Resolved 
Sir,
I am carry on business of house hold aplliences with some new promoting marketing idea i.e. When i am selling goods to costumer I taking advance from customers and they have to select goods ,

after 3 months eligible for prize or selected goods ( by lot withdrawal and get 1, 2, 3rd prize)

they will get prize or purchased goods ( prizes are like Bike, 5 grm Gold etc )

if I puchase these goods like Bike Gold etc for giving Price for giving prize to costumers can I claim it as Business expenditure fully in income tax or not?

please suggest me any other compliances required under Income Tax and other law

R.K Nanda (Expert) 05 December 2013
consult tax lawyer.
prabhakar singh (Expert) 05 December 2013
A repeated comercial query to which answer was given by me that your business model is that of a lottery which you can not run without permission of state and you were advised to contact DM office.
Rajendra K Goyal (Expert) 06 December 2013
Repeated query:

http://www.lawyersclubindia.com/experts/Marketing-promotion-advice--438976.asp#.UqFQXOKLq_I
Rajesh Thakker (Expert) 06 December 2013
The question is not that activity done by questioner is lottery is legal or not. The question is that what ever he purchased for his sales promotion is deductible in P & L a/c or not. The questioner has purchase the articles for his sales promotion. Therefore, it will be debited into P & L a/c as a sales promotion expenditure. I would like to draw the attention of the questioner that he should deduct the tax from the prize amount according to Income-tax Act, other wise this expenditure will be disallow under the section 40(a)(i) of the Income-tax Act.
Ashraf (Querist) 06 December 2013
how much i should deduct
in income(tds )
or vat
Ashraf (Querist) 06 December 2013
how much i should deduct
in income(tds )
or vat
Ashraf (Querist) 06 December 2013
how much i should deduct
in income(tds )
C. P. CHUGH (Expert) 09 December 2013
Agreed with Mr Rajesh, as Xperts, we should restrict our advise to the question.

The cost of article you would be distributing would be in the nature of commission payable for soliciting business and TDS as applicable on payment of commission or brokerage shall be applicable.
prabhakar singh (Expert) 09 December 2013
And for the business you are carrying cells would keep their door open to welcome you and for forewarning you i regret as i should have done so is an opinion from respectable experts.
prabhakar singh (Expert) 09 December 2013
And for the business you are carrying cells would keep their door open to welcome you and for forewarning you i regret as i should have NOT done so is an opinion from respectable experts.
Ashraf (Querist) 10 December 2013
Thanks to all experts for your valuable opinions.


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