Drawing for sole proprietor
This query is : Open
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.
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.
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.
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)
(You need to compute the net profit taking into account the allowable expenses as per income tax act)
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.
21 September 2016
In such a case only the net profit is taxable.
21 September 2016
Thanks Seeth Sir.
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