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Tax considerations with reference to specific management decision regarding 'Make' or 'Buy'?
Wiki User
∙ 14y ago
while deciding whether to make the product or to buy from external market, the following points should be kept in mind:
1.) if there is a surplus capacity & the co. still decides to buy the component, he may require to sell a part of plant & machinery, so that the co. can enjoy capital gainns tax benefit.
2.) if new industrial undertaking is to be establish to manufacture the product/component, the co. can see the conditions specified u/s 80IA/80IB, & can claim deduction of the income of the undertaking.
3.) if to manufacture the product/component, new machinery is required, the cost of machinery is not deductible but the can claim the benefit of depreciation.
Wiki User
∙ 14y ago
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