Treatment of Insurance in proprietory business

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sumit agarwal (Querist)
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25 March 2011 Dear Friends,

Should Medical/Life/Other Insurance be deducted from capital a/c or Should it be shown in P&L a/c in case of Proprietorship business? What are the tax implications?

Your Contribution will be appreciated.

Ravikant

Ravikant (Expert)
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25 March 2011 Generally taken to Capital Account,except for professional indemnity insurances and employee insurance ,,,insurance related to business

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Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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26 March 2011 for life insurance & mediclaim you have to debit the capital a/c as withdrawl bcz it not a expense
but other ins. like machinery,shop,vehicle etc. you have take in P&L as expense.

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