If a company purchase a land along with

company purchase a land along with property tax pending of 5 yrs so how do you account for it ??
Replies (4)
Quick Summary
When a company buys land with outstanding property tax from previous years, the pending tax should be treated as part of the land's acquisition cost. According to ICAI guidelines, all costs incidental to acquiring land are capitalised as a fixed asset. This means debiting the Land account and crediting both the Tax Liability and potentially a Bank or Sundry Creditor account for the payment.

Add property tax paid in cost of plot.
As per icai guidelines all costs incidental with the land is to be capitalized for fixed asset.

Dr. Land

Dr. Tax capitalised

Cr. Tax liability

The entry is .

fixed assets dr.
input c gst Dr.
input sgst Dr.
sundry creditor cr.

rates and taxes Dr.
Tax liability cr.
tax liability Dr.
cr. Bank
fixed asset Dr.
rates and taxes cr.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 07 October 2026
Article Assistant

Malhotra Rajesh & Associates

New Delhi

B.Com

View Details
Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
15 September 2026
Client-site CA associate

Aditya Muley and Co

Mumbai

CA

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details
Company
ARTICLESHIP 16 September 2026
Article Assistant

MANUJ SHARMA AND COMPANY

Noida

CA Inter

View Details
Company
26 September 2026
Chartered Accountant

pushpganga ventures

Pune

CA

View Details
Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details