alleryStart learning →Tax part of a capital good was depreciated for income tax. ITC on it?
AAllowed at half the rate
BAllowed in full next year
CNot allowed at all
DAllowed if asset is sold
Answer & Solution
Correct answer: C. Not allowed at all
Section 16(3) denies input tax credit on the tax component of capital goods once depreciation is claimed on it under the Income-tax Act.
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