cost of new software(if forming indispensible part of asset) if bought along with computer should added to computer's cost n thus both to be capitalized.If bought separately then also it should be capitalized.BUT if it is a routine activity to renew the software every year,then it should be debited to p&l account.AND in case of companies,software bought below rs. 5,000 can be 100% depreciated after being capitalized.