Properitor salary

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 November 2013 Dear Sir,
how do i make salary to Properietor.?
How can i compute it?
What is the percentage?
I want to know whole accounting procedure of Properitorship Firm.

Please help Me
Thanks

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

02 November 2013 In Proprietorship, proprietor is the owner of the business, he/she cannot take salary on their own. it can be treated as drawing and reduced from capital

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

02 November 2013 Also, such drawings are not an expense and shall not be considered so in the taxation.

CA Pallav Singhania

CA Pallav Singhania (Expert)
Follow

02 November 2013 Agree with Experts,
As there is no relationship of employer employee so no case of salary..
It will treated as Drawings from the Capital....

Querist : Anonymous

Querist : Anonymous (Querist)

02 November 2013 It Means From Reserve & surplus (Net Profit)
They can Withdraw for their personal use?

CA Pallav Singhania

CA Pallav Singhania (Expert)
Follow

02 November 2013 However, from tax purview it will not be allowed as expense...

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

02 November 2013 as a proprietor you can do whatever you want. However, for tax only the expenses made to third parties shall be allowed. money taken out by the proprietor won't be considered as expense.

In accounting parlance, such payments shall be considered as appropriations.

Querist : Anonymous

Querist : Anonymous (Querist)

02 November 2013 sir,
which expenses would be allowed in tax deduction as Properietors point of view.

CA Pallav Singhania

CA Pallav Singhania (Expert)
Follow

02 November 2013 If your turnover isn't exceed 1 crore than you can simply show 8 percent income and pay tax accordingly U/S 44AD...

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now