First insurance Premium
This query is : Resolved
28 December 2009
First Insurance premium paid on purchase of a car by an assessee is revenue expense as per Sec. 31 or Capital expense as it is an expense before the car is put to use(Practically no car can get out of the showroom without insurance)??
28 December 2009
It is capital in nature
28 December 2009
yes
28 December 2009
But sir doesnt specific provision prevail over a general one? Sec 31 is a specific provision for ANY Insurance Premium paid to mitigate the risk or damage to Plant & Machinery??
28 December 2009
But sir doesnt specific provision prevail over a general one? Sec 31 is a specific provision for ANY Insurance Premium paid to mitigate the risk or damage to Plant & Machinery??
28 December 2009
You can capitalise first insurance premium.
28 December 2009
capital expenditure.
28 December 2009
First premium will be capitalised because it is incurred before putting into use and any other subsequent premium will be expensed as per sec 31
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