drawings /capital
This query is : Resolved
21 May 2008
In case of maintaining the boks of accounts of an Individual the income tax , life insurance ,and bank charges added or substract from the capital or otherwise drawings , would u please tell me what is the basic concept and reason behind this kind of treatment ?
Shyam Lal Naik
(Expert)
21 May 2008
These are non deductible personal expenditure in nature.
Basic concept - Business entity concept
Basic concept - Business entity concept
CA Anuj Garg
(Expert)
21 May 2008
basically income tac is charged on business income and for calculating it only related exp are allowed to set off.
and as per Business Entity Concept owner and busines are seprate things
and as per Business Entity Concept owner and busines are seprate things
CA. Vineet Grover
(Expert)
21 May 2008
Hi Davinder,
As the bank charges is an allowable expenses in the books of the individual as per income tax law and should appear in the P&L a/c.
Drawings are not allowable expenses as per income tax law in the boooks of the individual, hence the same is shown as a deduction from Capital.
Rgds/
Vineet
As the bank charges is an allowable expenses in the books of the individual as per income tax law and should appear in the P&L a/c.
Drawings are not allowable expenses as per income tax law in the boooks of the individual, hence the same is shown as a deduction from Capital.
Rgds/
Vineet
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