Proprietorship withdrawal capital and drawing

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Pradeep Sharma (Querist)
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21 July 2022 Dear Experts,

our company is a proprietorship. last year we stared the business our owner introduce 1,00,000/- as capital in this company.
after some time he deposit 10,00,000/- and 8,00,000/- (Total amount Rs.18,00,000/-) in current account for purchase material.
after that he sale material in 25,00,000/- and he withdrawal 18,00,000/- back in his personal account.

now at the end of the year company profit is 7,50,000/- and he want to withdrawal his capital amount of Rs.-1,00,000/- and profit amount also.

my question is :-
1- Is this possible to withdrawal capital and all profit from company or we treated this as drawing from company
2.- on Which amount we calculate the income tax.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 July 2022 I don't understand the concept of a company having proprietorship!!!
1. If its proprietorship, the proprietor is free to introduce and withdraw any capital amount including any profit arrived and may have any debit balance also. There is no restriction over his capital investment ratio.
2. Income tax will be calculated on his aggregate income from all the sources, including Rs. 7.50 lakhs from the business.

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