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Regarding capital account of proprietorship firm

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Querist : Anonymous

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Querist : Anonymous (Querist)
26 February 2015 On 31st March, 2012, the Capital Account of Proprietorship Firm showed balance of Rs.20 Lakhs. I want to know whether the Proprietor can Invest Rs.5 Lakhs in business out of Capital Account. Will the said amount of Rs.5 Lakhs be liable to Income Tax?
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Nikhilkumar Bakliwal

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Nikhilkumar Bakliwal (Expert)
27 February 2015 Ofcourse he can invest out of his capital balance and there will be no Tax implication on this amount but yes tax can be levied on the outcome from the investment made.
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Querist : Anonymous

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Querist : Anonymous (Querist)
27 February 2015 Thank You Sir for clarifying my doubt.
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