what would be the head for the Payment for LIC & income tax of a director of company? Please advice.
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Replies (7)
DEBIT THE PERSONAL ACCOUNT OF DIRECTOR FOR SUCH PAYMENTS
you will have to charge those to personal accounts of directors. these are not deductible expenditure for company
Company has a seperate legal entity.It has no relation with its members or directors.So,this expense is debited in Director's personal A/C.
| Originally posted by :Jaspreet Singh | ||
| " | Company has a seperate legal entity.It has no relation with its members or directors.So,this expense is debited in Director's personal A/C. | " |
yup charge to personal acc of the director
The company can take the deduction of LIC paid for the director and can show it as Keyman Insurance. However, the income tax paid can be debited to the profit and loss acoc*nt in Schedule VI Final Accounts but shall not be allowed as deduction in the Income Tax Computation.
i agree with mr. Kabra.
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