You should capitalise the land purchased and you can expenses premiums.
To capitalise or expense the premiums for LIC and a land purchase
This year i purchased a plot of size 30*60 ft in city area. I run a sole propreitorship bussiness. Should i capitalise this purchase in my balance sheet or should i Expense it thereby decreasing my capital ?? this question is also for the premiums paid towards ULIPs ??
Asked 7 years ago in Income Tax
can i capitalise the premiums also ?? and is it upto my discretion to choose what to capitalise and what to expense or there are specific rules ? and where to find those rules ?
Asked 7 years ago
Premium relates to personal in nature thus debited to Capital account. If you want you can show it as assets also. And land being a capital assets and its an capital investment thus shown as assets so that you can use the land for future business use also
Hello Sir,
Since both the heads that the you have mentioned fall a part of your investments and hence have to be capitalised only.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hi,
Land purchase has to be capitalized.
However, you can either expense or capitalize LIC/ULIP Premiums. Note that the premiums will however be disallowed while calculating Income from Business/Profession since it is a personal expense and also you will get 80C Deduction for the same. So, it is advisable to capitalize the Premiums also
Dear Sir,
You should capitalise both the things.
Please feel free to call/revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
It is better you book it under Balance Sheet of proprietorship concern, if you are not maintaining personal Balance Sheet.
ULIPs you can debit to capital account.
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