Drawing for sole proprietor

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Ajit kumar Panda (Querist)

19 September 2016 Dear Sir/Madam,

I am a freelancer which belongs to Sole Proprietor category (I think so). I have net profit and personal drawing. Please advise whether both are taxable or only net profit? It would be great if you can quote section number or judgement.

Thanks,
Ajit Kumar.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

20 September 2016 If you have deducted personal drawings from the net profit then it will added back and net profit will be taxed including personal drawings.

Amol S Joglekar

Amol S Joglekar (Expert)

20 September 2016 net profit is taxable. Drawings is not taxable.
(You need to compute the net profit taking into account the allowable expenses as per income tax act)

Ajit kumar Panda

Ajit kumar Panda (Querist)

20 September 2016 Hi Seetharaman, Thanks for getting back to me. Personal drawing will come in the Balance Sheet and Net profit is in the P&L statement. So Drawing is not deducted from Net Profit. Please advise. Thanks, Ajit Kumar.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 September 2016 In such a case only the net profit is taxable.

Ajit kumar Panda

Ajit kumar Panda (Querist)

21 September 2016 Thanks Seeth Sir.

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