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Personal assets in proprietary busness

aayush kamra (Article) (34 Points)

24 May 2017

Hi I want to know that in case of proprietary business should we show the personal assets of proprietor in business balance sheet and so in ITR 4 if business is undergoing voluntary tax audit and income is less than 50 Lakh

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(Guest)

personal expense debited to capital a/c weather it is capital or revinew in nature

rama krishnan (12234 Points)
Replied 24 May 2017

no..it should not be shown unless you use that personal assets for business purposes. for example if you have a residential property and you are earning house property income from such property then no necessary to show that property in business b/s but if you use the same property for business purpose then the same need to be shown in business b/s

(Guest)

All personal assets (property, investments even advances given) as and when the transaction is done, should be duly disclosed in the BS of a proprietor. This is helpful in case a query comes about the source of such investment.

No depreciation will be claimed on the non business assets. Also no deduction for interest will be claimed on loans taken for purchase of non business assets.

If the proprietor chooses to keep the personal assets away from balancesheet, atleast he should keep a working ready about the source of such assets(eg, gift/loan/drawings)

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