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LIC ON BS

shaikh sajeed (Associate) (151 Points)

28 March 2018

IF I HAVE TAKEN LIC , CAN TOTAL
PREMIUM PAID BE SHOWN ON MY BALANCESHEET, EVENTHOUGH I HAVE TAKEN THE BENEFIT U/S 80C AND IT FROM MY TOTAL INCOME. CAN IT BE SHOWN AS MY INVESTMENT ON BS.

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 28 March 2018

Usually life insurance policies are not accounted in BS, while premium paid is debited to capital account as personal expense.

Sometimes, people declare sum assured under policy as investment, by adding equal amout to capital.

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shaikh sajeed (Associate) (151 Points)
Replied 28 March 2018

What if LIC is shown in BS as INVESTMENT....WHAT IS THE RIGHT PROCEDURE

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 28 March 2018

Not recommended. As the maturity or claim amount received is tax-exempt, so it is directly added to BS.......... and many times in the account of beneficiary, so usually the insurance policies are not declared in BS.

But is required for any purpose, sum assured amount is declared under investment.

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 28 March 2018

PREMIUM PAID IS SHOWN AS EXPENSE DEBIT SIDE OF BS

AND THE SAME IS ELIGIBLE FOR DEDUCTION U/S 80 C

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shaikh sajeed (Associate) (151 Points)
Replied 28 March 2018

the sum assured

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RAJA P M ("Do the Right Thing...!!!") (128010 Points)
Replied 28 March 2018

LIC payment not accounted in PandL...

It's mostly transfered to capital account.. In case not accounted in capita account then it will be treated under Investment head...