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Hello sir…. kindly help me out with the tax payment in this AGD Co (FMC, 12/05, amended)
Actually sir. Tax is payed in one year arrear
While calculating the present value of leasing cost though the lease rentals are paid in year 0 tax advantage is got in the year 2 pleas help me out with tax hereThe first lease payment is at time 0, which is the start of the first year.
The tax is calculated at the end of the accounting year, which is time 1. Because there is a one year delay in paying tax, the first tax flow is one year later at time 2.
I explain all this, with examples, in my free lectures on lease v buy. The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
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