Tally accounting for saving bank interest

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 October 2016 while doing proprietorship accounting saving bank interest credited to bank account shall be treated as other income or shall be credited to proprietors capital account?
If it is considered as other income in computation saving bank interest will get considered twice 1.as part of business income (reflected in profit)" and other source income.
Please guide me.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
Follow

14 October 2016 Not to be credited to proprietor's capital account. To be credited to Profit and Loss account as Savings Bank interest. It is income from other source but this is for tax computation there will be no accounting treatment for this.

Querist : Anonymous

Querist : Anonymous (Querist)

14 October 2016 how come no accounting treatment if proprietors saving bank account is used for business.interest credited will be treated as other income so it will get credited to p and l but then if I import data form tally to accounting software.saving interest will be shown as other source too and it will be part of profit already. what can be the solution to this?

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

14 October 2016 while doing computation for income tax purpose, the same shall be reduced from the Profit and Loss account and shown separately under income from other sources.

Message likes : 1 times

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
Follow

14 October 2016 I am not able to understand you. There is only one transaction.

Bank A/c Dr...

To Saving Ban Interest.A/c..

Simple.....

while tax computation you will be showing its as Income from Other Sources....From PL Profit or Loss whatever may be will be transferred to Prop Capital Account.

Message likes : 1 times

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

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok