TAX AUDIT


(Querist)
14 September 2019
DEAR SIR/madam,


I have one confusion in Form 3CD we required to disclosed chapter VIA deduction . I want to know whether such deduction expenses should form part of capital account of proprietor?.

If we will enter deduction details in form 3CD as it is the personal expenses of the assessee not of firm business , it will go?


Gokul Sharma (Expert)
14 September 2019
these expenses will reduced the capital and take deductions under sections if income tax.

MEENAKSHI POKERA (Querist)
14 September 2019
but it is personal expenditure na

Karim N Shaikh (Expert)
14 September 2019
Deduction under chapter VI is personal expenses , but if such payment is made from Business Account ( CA/CC/OD) then such expenses you can treat as Drawing as pass such entry from Capital account and as per my opinion it is good to show all chapter VI deduction from Capital account if same is paid from Bussiness Account hope you understand

MEENAKSHI POKERA (Querist)
16 September 2019
if we paid scholl fees in cash and hen i have not entered in books of firm. My question is that whether I should entered it in form 3CD where he asked about to entered Chapter VIA deduction ?

Karim N Shaikh (Expert)
16 September 2019
If you have Source from were cash come then you can show payment made for school fees, if such person is proprietor cash withdraw for business expenses & such cash can be used to pay school fees and same as treated as drawing and in that case you can take it as chapter VI deduction. Remember to 40A(3) is apply when expenditure made in cash excess of Rs 10000 , this provision applicable for Business Expenditure and not for personal expenditure.
Therefore in my opinion you can treat School fees as Drawing and Debit to Capital account and take Deduction in Chapter VI is 80C and same mention inAudit Report
hope you understand

MEENAKSHI POKERA (Querist)
16 September 2019
THANKS SIR FOR HELPING ME


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