Accounting Treatment of LIC payments

why life insurance is drawing ...not an investment ????

I cannot find Accrued Bonus entry in tally ERP9? How do I create one?

One of my policy max life insurance was discontinued as i did not pay any amount after first two or three year. After completion of 5 years I recd back some of the amount. How do I treat this in tally?

I am using Income and Expenditure instead of P&L as I am creating personal accounts for my wife. She is a housewife. Please help.

How to create a ledger for accrued bonus. I am maintaining a personal account. I have received Sum assured + Vested Bonus + Interest.

I have done entry as following:

Dr Bank A/c - The amount recd  Rs.xxx/-

Cr - LIC Policy Rs.xxx/-

I have just crossed the border line for Income Tax paying as I know I have done the wrong entry. I know that maturity amount recd is tax free but I do not know how to do that entry in Tally.

I am totally new in accountancy and tally. Please help me.

Originally posted by : Deepak
	why life insurance is drawing ...not an investment ????

LIC does not allocate you investment units, but give you assurance for monetory safety, 

premium paid is insurance premium and for that reason its available for deduction u/s 80C, ( Chapter VIA) of Income Tax 

on return the gross amount received is exempt from tax and to be treated as capital receipt, without any tax ( there are few  exeptions also, like pension plans, keyman insurance etc) 

Thanks a lot sir.

Originally posted by : Mohammed Shahid Rahman
	How to create a ledger for accrued bonus. I am maintaining a personal account. I have received Sum assured + Vested Bonus + Interest. I have done entry as following: Dr Bank A/c - The amount recd  Rs.xxx/- Cr - LIC Policy Rs.xxx/- I have just crossed the border line for Income Tax paying as I know I have done the wrong entry. I know that maturity amount recd is tax free but I do not know how to do that entry in Tally. I am totally new in accountancy and tally. Please help me.

Hi,

The entry would be:

Bank A/c Dr.

          To LIC Account

          To Vested Bonus (Income from Other Sources)

          To Interest (Income from Other Sources)

It is correct that, the policy amount shall not be charged to tax and only Bonus and Interest shall be offerred for tax.

There is no connection between Income Tax Return and treatement of it in Tally.

The income of Bonus and Interest is just to be shown in the ITR and not the principal amount of LIC policy.