An entity incurred Rs. 800,000 on feasibility studies and trial production before the commencement of its commercial business operations. Under Section 25, how will this pre-commencement expenditure be treated for tax purposes?

Test yourself: pick an answer

• A)A) It will be fully deducted in the first year of business.
• B)B) It will be amortized at 20% per annum on a straight-line basis.
• C)C) It will be amortized at 15% on a declining balance basis.
• D)D) It is a capital expenditure and is not allowed as a deduction.