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How to prepare first balance sheet

Deep Shah (Job) (169 Points)

21 June 2017

As per new RERA Rules in Maharashtra, every broker should take licence for doing broker business in Real Estate. And for taking licence they asked ITR Acknowledgement. And as per my research work if income is earned through Brokerage than assessee need to maintain books of accounts under section 44AA. So as per this rule I need to prepare balance sheet and Profit & Loss A/c. But since this will be my first balance sheet, what should be my opening capital balance. I have no office, i do work from my rental home and most of our business is through phone and at site of property. Can anyone guide me what should be my opening capital balance and how to prepare first balance sheet. My gross receipt not exceeded 3,00,000 in a year. Any rough idea is also welcome. Thank You.

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9 Replies

SONU (Student CA Final ) (38 Points)
Replied 21 June 2017

File return u/s 44AD Give nature of business in ITR as 'others'

(Guest)

Your capital would be: total business assets less total business liabilities.

You should take help from a CA in balance sheet preparation.

Peeyush Chaturvedi (53 Points)
Replied 21 June 2017

You can File your return u/s 44AD and declare the income on presumptive basis from brokerage income.

rama krishnan (12234 Points)
Replied 21 June 2017

brokerage/ commission business is not eligible for 44AD

1 Like

Peeyush Chaturvedi (53 Points)
Replied 21 June 2017

For opening capital you can sum up all your business related assets whatsoever, including the last financial year closing bank account balance plus some cash in hand(on general approx basis) minus any business associated liability if any. As you are operating at small infrastructure of your business its not so rigid to have a handsome amount of capital, but up to a genuine level.

rajni sharma (none) (444 Points)
Replied 21 June 2017

why brokage/commission do not eligible for 44ad?

rama krishnan (12234 Points)
Replied 22 June 2017

6] The provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to—

[i] a person carrying on profession as referred to in sub-section [1] of section 44AA;

[ii] a person earning income in the nature of commission or brokerage; or

[iii] a person carrying on any agency business.

Sagar Devani (Corporate and International Taxation) (1174 Points)
Replied 22 June 2017

You might have incurred certain expenditures for earning this income say telephone charges, conveyance, etc. You recieve income after certain period. So the amount you have paid for incurring this expenditure till the time you have recieved income can be shown as Capital Invested it.