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Advance amount

Tax queries 109 views 1 replies

S. RAVICHANDRAN

Finance Professional

169 Points Joined June 2014

SIR

THE ADVANCE AMOUNT TRANSFERRED TO INDIRECT INCOMES IN THE P&L ACCOUNT AND SUBSQUENTLY INVENTORY ALSO REDUCED. THE ADVANCE AMOUNT BEING RECEIVED FOR MANUFACTURE OF GOODS. PLEASE LET ME KNOW THE TRANSFERRED ADVANCE AMOUNT IS CHARGEBLE UNDER WHICH HEAD WHETHER BUSINESS INCOME OR CAPITAL GAIN. WHICH HEAD IS APPLICABLE.

PLEASE CLARIFY

REGARDS

S. RAVICHANDRAN

Replies (1)

Rishi Mehta

Ur friend

1533 Points Joined June 2017

Advance received during the course of business for supply of goods and subsequently written off in the books of account will be taxable under the head of profit and gains of business or profession as per section 28.
Reason being advanced amount received during the course og business.
But I want to know, Why did you transferred the advance amount to P& L A/C?