Personal Drawings

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A cyber cafe owner who incurred a loss and redeemed mutual funds for household expenses asked if the redemption could be treated as personal drawings. The advice given is that mutual fund redemptions cannot be shown as personal drawings. Any gains from these redemptions are taxable, while business losses can be offset against other income or carried forward.

Amitava Chakrabarty

Amitava Chakrabarty (Querist)
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09 September 2025 I have started a cyber cafe in FY 2024-25 and have suffered a loss of around Rs 1 lakh. In order to meet my household exepenses, I have redeemed around Rs 3 lakh from my MF investments during the year. Can I show the redemption amount as personal drawings in Balance Sheet? If yes, how to adjust it?
And how to reveal it in ITR-3?

Dhirajlal Rambhia online

Dhirajlal Rambhia online

(Expert)
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09 September 2025 No. Redemption from MF investment cannot be declared as personal drawings. The gain from NF redemption is liable to tax. The loss from business can be adjusted against IFOS & balance if any can be carried forward.

Dhirajlal Rambhia online

Dhirajlal Rambhia online

(Expert)
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20 September 2025 Good Luck..

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